Latest French wheat export cut cushioned by rise in on-farm use

Farming agency FranceAgriMer cut its forecast of 2017/18 French soft wheat shipments outside the EU for a fifth straight month, underscoring a slow export pace, but the impact on inventories was offset by a sharp rise in expected on-farm use. France, the European Union's biggest grain producer, has faced stiff export competition this season, led by Russia, increasing its reliance on main overseas market Algeria.
In its monthly supply and demand outlook for cereals, FranceAgriMer pegged French soft wheat exports to non-EU countries in the 2017/18 season to June 30 at 8.5 million tonnes, down from 9.0 million estimated last month and closer to the expectations of private forecasters. "The hopes that we still had last month were not borne out," Ludovic Paris of FranceAgriMer's cereal division said regarding non-EU exports.
Russia's dominance in wheat export markets this season was underscored by the 3 million tonnes it shipped in February, three times the normal level in a month usually marked by winter logistical difficulties, Paris added. But it cut marginally its projection of France's end-of-season stocks, to 3.17 million from 3.25 million, as the reduced demand from outside the EU was offset by a rise in expected intra-EU trade and above all a sharp increase in the volume of wheat forecast to be consumed on farms and not marketed.
FranceAgriMer officials did not cite a particular trend in on-farm consumption but said limited information in this area led it sometimes to make sharp adjustments. It now projects 2017/18 on-farm use of soft wheat at 2.8 million tonnes, 500,000 tonnes higher than last month. This led it to reduce by a similar amount its estimate of the volume of crop marketed in 2017/18, now seen at 33.3 million tonnes.
Soft wheat exports within the EU were projected 100,000 tonnes higher than last month at 8.5 million tonnes, drawing level with expected non-EU shipments in what would be the highest exports inside the bloc in 12 years. Traders and analysts have said brisk demand from other EU countries, partly linked to weather-hit harvests last year in countries like Spain and Germany, may help France avoid having burdensome inventories at the end of the season.
In other cereals, FranceAgriMer projected maize ending stocks at 2.7 million tonnes, down from 2.8 million estimated last month, while it raised its barley ending stock forecast by nearly 100,000 tonnes to 1.1 million tonnes.