United States Department of Agriculture (USDA) projected EU wheat exports to rebound to 28.0 million tons due in large part to its bigger crop in its October World Grain Markets and Trade report.
“Growing conditions across the region were generally good this year, resulting in production of 152.0 million tons, up more than 15 million from last year’s drought-stricken crop. With abundant supplies, exports are projected to rebound in light of competitive pricing with other wheat suppliers, a rebound in global trade, and ample supplies of domestic feed grains.” the report said.
European wheat prices are more competitive with Russia than they were this time last year. EU exports were competitively positioned in the early months of 2019/20 as Russia’s total supplies are smaller based on reduced carryin which more than offsets a slightly larger crop. This stands in contrast to the situation last year, when Russian exports were proceeding at a torrid pace and EU wheat was struggling to reach many regional markets.
According to USDA, total global trade is projected to rebound this year and the European Union is positioned to benefit from this rising tide. Global trade is projected up about 5 million tons from 2018/19 when consumption dipped in light of tightening global availability. With Russia having tighter supplies overall, the major beneficiaries of larger global wheat trade are expected to be the European Union and Ukraine.
French soft wheat export forecast increased
Farm office FranceAgriMer sharply increased its forecast for French soft wheat exports this season, pointing to optimism among traders that a big harvest and competitive prices would let France expand overseas sales. In supply and demand projections, the agency raised its estimate of French soft wheat exports outside the European Union in 2019/20 to 11.7 million tonnes from 11.0 million seen last month. The revised 2019/20 forecast was up nearly 14% compared with last season’s level and would be a four-year high.“This (forecast) is seen as being at the low end of market expectations. Our view is rather conservative compared to some exporters,” Marion Duval, deputy head of FranceAgriMer’s grain unit told reporters.
Exporters saw scope for France to take advantage of its second-largest harvest on record to tap into strong demand from Morocco and regain some market share in West Africa from Black Sea suppliers like Russia and Ukraine, she said.Traders were also taking a relaxed view on prospects in France’s top export market Algeria, which had rattled some market players by passing on imports for October, she added. While French wheat exports to Algeria are lagging last season’s pace, traders anticipated volumes would pick up and match the 2018/19 total of around 5 million tonnes, Duval said. However, freight costs and a potential upturn in Russian shipments after an unusually slow start to the season for the world’s top wheat exporter could curb French sales, she said.