French wheat export outlook trimmed as competition seen continuing

PARIS: France's farming agency on Wednesday trimmed its forecast for wheat exports outside the EU this season, cautioning that competition would continue to be tough in key North and West African markets.

Traders and analysts have seen scope for France, the European Union's largest wheat producer, to accelerate its overseas sales in the second half of the July-June marketing season as supply tightens in top exporter Russia.

Doubts over the quality of Argentine wheat have also encouraged hopes that French wheat is well placed along with U.S. wheat to profit from a slowdown in Russian shipments.

However, an import tender on Tuesday by Algeria, France's main overseas outlet, showed French and U.S. prices closely matched, according to traders, while offers in an Egyptian tender on Wednesday suggested Russian wheat remained competitive.

"Competition remains very stiff on the world market and U.S. and Argentine wheat are going to be in strong contention in our main outlet Algeria in the second part of the season," Marc Zribi, head of FranceAgriMer's cereal and sugar division, told reporters.

France has become more reliant on sales to Algeria this season amid intense Russian competition elsewhere. Algeria accounted for about 80 percent of French soft wheat exports outside the EU in the July-November period, customs data showed on Tuesday.

FranceAgriMer lowered its forecast of 2018/19 French soft wheat exports outside the EU to 8.7 million tonnes from 8.8 million last month.

However, the latest forecast was relatively cautious and should be reached comfortably, Remi Haquin, head of the FranceAgriMer's cereal committee, said.

The latest export forecast would still be 7 percent above 8.1 million tonnes seen last season when record Russian shipments and high demand within the EU curbed French exports outside the bloc.

FranceAgriMer kept unchanged its outlook for 2018/19 soft wheat exports within the EU at 7.7 million tonnes, down nearly 17 percent from 2017/18.

The reduced non-EU exports led FranceAgriMer to trim its outlook for French soft wheat stocks at the end of the season on June 30 to 2.8 million tonnes from 2.7 million estimated last month.

In its monthly supply-and-demand data, FranceAgriMer raised its outlook for 2018/19 barley ending stocks to 1.3 million tonnes from 1.1 million, mainly due to a reduced export outlook.

Expected maize ending stocks were raised to 2.0 million tonnes from 1.9 million. Increased supply due to upward revisions to marketed crop and imports outweighed slight upward adjustments to animal feed and export demand.