Strategie Grains cuts EU export forecast for fourth month

Consultancy Strategie Grains on Thursday cut its forecast for the European Union's soft wheat exports this season, citing poor competitiveness of French and Polish wheat on the world market. The analyst projected exports in the current 2017/2018 (July/June) season at 21.4 million tonnes, down 300,000 tonnes from last month, and now 3.7 million below its July forecast.
EU exports stood at 24.1 million tonnes in 2016/17. French wheat exports outside the EU this season are expected to 8.5 million tonnes, down 300,000 tonnes from the 8.8 million tonnes estimated last month, while Polish exports would be at 1.1 million tonnes, down from 1.4 million tonnes expected in January.
"French wheat is too expensive compared with the Black Sea origins (on African destinations) and with Argentinean wheat (on Algeria), whilst producers in Poland remain reluctant to sell on their wheat," Strategie Grains said. The fall in exports would contribute to a jump in the carryover in the EU's largest wheat exporter, France, to 3.8 million tonnes, up from 3.5 million last month.
Farm office FranceAgriMer on Wednesday cut its non-EU export estimate for France by 300,000 tonnes, now seen at 9 million and lifted its ending stocks estimate by a similar volume to 3.25 million tonnes. French exports were still well above last season when a poor harvest took a toll on exports.
Strategie Grains emphasised that Black Sea countries, especially Russia, continue to dominate global wheat export trade, taking a significant toll on EU exports, with an additional squeeze from strong Argentine exports. For the 2018/19 season, Strategie Grains cut its estimate for EU wheat exports to 24.1 million tonnes from 24.4 million last month, still well above the current season, with Germany, Poland and France benefiting most from the rise.
"The growth in world import requirements should be favourable to a potential increase in EU exports in 2018/19, although our forecasts for the Black Sea countries and Argentina already maximise project shipments from these countries," Strategie Grains said.