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PARIS: French sales to China, a big expected Romanian crop and competitive prices for German and Baltic supplies should yield brisk EU wheat shipments at the start of next season while an export levy clouds Russian prospects, analysts and traders said.

“The signs are pretty favourable,” Laurent Crastre, wheat analyst with Strategie Grains, said. “EU supply is going to be very healthy.”

Showers and hot weather in the past month have put the bloc on course for a bigger wheat crop this year.

Competitive prices are helping early EU export sales for the new season that begins in July, particularly as a variable export tax in Russia complicates pricing of what is also expected to be a large Russian harvest.

“If the Russian export barriers remain, some of the demand will be switched to the EU,” a German trader said.

Strategie Grains last week raised sharply its forecast for EU soft wheat exports, citing attractive prices in Romania and Bulgaria as well as Germany, Poland and the Baltic states.

Heavy rain in Romania could hurt harvest quality, but the country would still find ready markets given tight global supply of feed grains, according to traders and analysts.

France, the EU’s largest wheat exporter, is set to be a large supplier of China for a third straight season.

After traders reported Chinese purchases of up to 1 million tonnes of French new crop earlier in spring, they cited a further round of deals in late May thought to cover between two and five panamax vessels, or up to 300,000 tonnes.

However, Chinese demand has also pushed up French prices, raising doubts among traders about whether France will be able to sell enough to other destinations.

Other question marks for EU prospects include any surge of Russian supplies, a fluctuating euro-dollar rate and importers’ willingness to pay high grain and shipping costs.

But the outlook for EU suppliers is still bright.

The French focus on sales to China could allow German and Polish wheat to claim more large exports to Algeria.

Iran is also expected to remain a major outlet for German wheat while traders anticipate Turkey and Pakistan being active importers to curb domestic prices.

“The demand side looks positive,” another German trader said.

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