European Wheat Exports Surged by 50 Percent Amid Failed Grazing and Black Sea Supply Uncertainty

European wheat exports have seen a significant surge in demand, reaching around 50 percent above the previous year's pace. This increased demand is attributed to several factors, including failed grazing across parts of the continent. Bertrand Oesterle, Vice President of Clearing and Execution Sales at StoneX Financial Ltd, noted that 'I visited some cattle farmers and some dairy farmers that cows look really, really skinny because there's been no grazing.' As a result, European farmers are being forced to choose between buying in feed earlier than usual or culling their animals.

The increased demand for wheat is also driven by international buyers turning towards European origin due to unreliable Black Sea supply. Countries such as Egypt, Sudan, Libya, Turkey, the United Arab Emirates, and Nigeria have all opted for European wheat. This has created a conflict between export demand and domestic feed rations, with Europe struggling to meet both demands from its own constrained supply base.

Reduced maize availability has exacerbated this issue, leading to a substitution towards wheat in feed rations. Oesterle stated that 'there is a conflict at present between the search for European export because there's international demand for it and the switch from wheat into the feed rations because there's less maize available.' As Europe serves both domestic and international demand, its livestock sector continues to bid for grain.