French wheat exports still have upside after forecast hike

PARIS: Farming agency FranceAgriMer raised sharply its forecast for French soft wheat exports outside the European Union in 2018/19 and said there was scope for more upgrades as competitively priced French wheat draws late-season demand from importers.

Traders have been anticipating that France, the EU's biggest grain producer, would see an upturn in wheat shipments as supplies run low in cheaper exporting countries such as Russia and Ukraine. French successes in recent tenders by top importer Egypt have bolstered sentiment.

French soft wheat shipments to non-EU countries are now expected to reach 9.5 million tonnes in the 2018/19 season to June 30, up 7 percent from 8.85 million projected last month, FranceAgriMer said in a cereal supply and demand outlook on Wednesday.

After being heavily reliant on main export outlet Algeria in the first half of the season, the French wheat crop was attracting demand from other importing countries in Africa and further away destinations like Cuba and Yemen, Marc Zribi, head of FranceAgriMer's grain unit, said.

"The 9.5 million tonnes is a conservative estimate in a context where some market participants are more optimistic," he told reporters.

"There is a good chance that this figure will be surpassed but it's hard to say by how much."

In Egypt, FranceAgriMer sees scope for France to add another 120,000 to 180,000 tonnes in sales, which could bring the season's volume to 660,000 tonnes, Zribi said.

Exports to Morocco are expected to reach 700,000 to 800,000 tonnes while shipments to Algeria could surpass 5 million tonnes, he added.

Shipping data compiled by Reuters shows that almost 600,000 tonnes of soft wheat has been loaded in France for Morocco so far this season, and 3.85 million tonnes for Algeria.

Traders are watching to see if French wheat claims significant sales in tenders being held on Wednesday by Algeria and Tunisia, other major cereal importers, in the wake of a slide in international wheat prices.

FranceAgriMer's raised forecast for non-EU soft wheat exports, 17 percent above the 2017/18 level, led it to cut its estimate of 2018/19 soft wheat ending stocks.

Carryover stocks are now seen at 2.4 million tonnes, down from 3.0 million estimated last month. That would be 18 percent below last season's volume and represents a level seen by the market as balanced.

In contrast, the agency raised its outlook for maize (corn) and barley stockpiles as it reduced export expectations.