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InVivo lowers bar further on France's wheat export hopes

12 августа 2016 года

InVivo lowered further the bar on French soft wheat export hopes to a 15-year low, fuelling questions of which rivals will fill the void in international trade, with Russia, Germany, the US and even the UK in the frame.

InVivo, one of France's top grain exporters, pegged at 4.8m tonnes its forecast for French soft wheat shipments in 2016-17 – a plunge of more than 60% year on year, and below the forecast of 5.1m tonnes unveiled on Tuesday by consultancy Agritel.

With French exports within the EU pegged by InVivo at 6.7m tonnes, also down on last season, total shipments would come in at 11.5m tonnes, down some 40% year on year, and the weakest figure since 2001-02.

The group, formed of more than 200 member co-operatives, blamed the decline on the poor weather during the wheat flowering and grain-filling periods, saying that "France has never experienced before the weather sequence seen in May and June".

Many commentators have cut below 30m tonnes their forecasts for France's soft wheat harvest, the European Union's biggest, with Agritel on Tuesday lowering its estimate to 28.7m tonnes, well below last year's 41m-tonne result.

Trade void

The prospect of weak wheat exports has created a debate among investors among which other countries will fill the void in international trade, particularly to the key North African market which see France as a default origin.

Agritel on Tuesday forecast Germany taking top spot in EU wheat exports outside the bloc in 2016-17 although, with an estimated volume of 6.65m tonnes, its ability to make-up for France's shortfall is limited.

Germany is also renowned as a seller of harder, higher protein wheat than the soft wheat typically grown in France.

'Enormous crop'

In Chicago, broker Terry Reilly at Futures International, flagged the prospect of business going further afield, saying: "What the trade don't know is if the export business will spill over to Russia and Ukraine, or the US."

"Russia is expected to have an enormous crop this year," with analysis group Ikar on Tuesday lifting its forecast for the country's wheat harvest to a record 70m tonnes, and RusAgroTrans talking last week of an even bigger figure.

The prospect of extra business from importers switching from France has been viewed as behind a rise in Russian wheat prices, which might be expected to feel significant downward pressure from the weight of the country's bumper harvest.

Prices of wheat for export from the Black Sea have risen $2.50 a tonne week on week to $167 a tonne, according to SovEcon, which is expected on Thursday to issue its own updated estimates for Russia's harvest.

'Pleasing results'

On a smaller scale, there is some hope among UK merchants too of meeting some unfulfilled French trade, with early UK harvest findings beating expectations depressed by poor results from the winter barley harvest.

Traders at one major grain trading house reported "pleasing results on the quality", adding that "significantly better than expected yields have also been widely reported, although not quite the record breaking figures seen in many places last year".

"Subsequently we have seen milling premiums lowered, as early fears of a drop in quality, as seen in France, begin to reside."

The UK last year, for the first time in its history, achieved a second successive harvest above 16m tonnes, although estimates for this year's harvest are well below 15m tonnes.

'Get-out-of-jail card'

A UK grain trader told Agrimoney.com: "UK farmers could have been given a bit of a get-out-of-jail card.

"With the pound weak, if the quality is good, they may be able to find buyers far more easily and at better prices than they would have expected a couple of months ago."

Separately on Wednesday, customs data showed UK wheat exports in 2015-16, which closed at the end of June, at 2.85m tonnes, a rise of 46% year on year, and a seven-year high.

http://www.agrimoney.com/

Source: Agrimoney.com  |  #grain   |  Comments: 0   Views: 70

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