French wheat stocks seen hitting 19-year high

PARIS: Farm office FranceAgriMer on Wednesday raised its forecast for French soft wheat stocks at the end of this season to a 19-year high as competition from Ukraine curbs French exports to other European Union countries.

French soft wheat stocks at the end of the season on June 30 are now seen at 3.50 million metric tons, up from 3.44 million forecast last month, FranceAgriMer said.

That would be a 37% increase on last season’s stocks and is up from FranceAgriMer’s forecast of 3.44 million tons last month. Imports of cheaper Ukrainian grain into the EU - an issue contributing to protests by farmers - are continuing to curb demand for French wheat within the bloc, particularly in Spain and Italy, FranceAgriMer analyst Adele Dridi told reporters.

The office reduced its estimate for French soft wheat exports within the EU this season to 6.32 million tons from 6.55 million projected in January.

The new forecast is down 1% from last year.

Together with a slight cut to expected domestic demand, the lower forecast for intra-EU exports outweighed an upward revision to FranceAgriMer’s forecast for French soft wheat exports outside the EU in 2023/24, now pegged at 10.25 million metric tons compared with 10.1 million tons last month.

French wheat exports outside the EU have been bolstered by a busy winter loading schedule for Morocco and China. Grain trade participants did not appear worried by large projected stocks, seeing scope for fresh export demand in the latter part of the season and with reduced planting raising the prospect of a smaller harvest this year, Dridi said.

The agriculture ministry on Tuesday cut its estimate of winter soft wheat sowing to the second-lowest in 30 years following heavy rain. “It has continued to rain so the situation remains tough,” Benoit Pietrement, a farmer and head of FranceAgriMer’s grain committee, said.

A significant shift to spring crops like maize is expected despite unattractive prices as farmers have limited choices, he added. Projected maize (corn) stocks at the end of 2023/24 were increased by FranceAgriMer to 2.37 million tons from 2.18 million in January, as estimated harvest supply was revised up while domestic demand was trimmed.

The new maize stocks forecast is 43% above the 2023/23 level and the highest in six years.