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 released on Wednesday, 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.
'Low End Of Market Expectations'
"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.
A Relaxed View
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.
Sharp Upward Revision
The sharp upward revision to exports outweighed an increase to harvest supply, leading FranceAgriMer to lower its projection of soft wheat stocks at the end of this season to 2.9 million tonnes from 3.3 million seen last month.
That would nonetheless be 32% above 2018/19 stocks and a three-year high.
The French farm ministry on Tuesday pegged soft wheat production at 39.7 million tonnes, nearly 17% above last year's level.
FranceAgriMer also reduced its 2019/20 barley ending stocks outlook, to 2.1 million tonnes from 2.2 million last month, as it raised expected exports outside the EU to 3.6 million tonnes from 3.4 million.
The increased barley export forecast was 50% above last season's volume.
Forecast durum wheat exports, including shipments within the EU, were increased by 100,000 tonnes to 1.1 million, with quality problems facing Canada's crop expected to shift demand towards other suppliers, FranceAgriMer said.
For maize, the office lowered its 2019/20 stocks forecast to 2.1 million tonnes from 2.3 million, reflecting a cut to supply that was in line with the farm ministry's revised harvest estimate on Tuesday.