French Wheat Stocks to Rise as Exports Slump, Crops Office Says

France’s wheat stocks at the end of the current season will be higher than previously forecast on falling exports and as livestock breeders switch to cheaper barley to feed their animals, crops office FranceAgriMer said.

Soft-wheat inventories are expected to be 4.05 million metric tons at the end of June, compared with a December forecast of 3.54 million tons, according to documents distributed at a news conference by FranceAgriMer at Montreuil-sous-Bois near Paris today.

French exports are being hurt by a requirement from Egypt, the world’s largest wheat buyer, for cargoes of 60,000 tons to be loaded at a single port, according to the crops office. The country’s main grain-export port of Rouen on the Seine River is limited to 40,000-ton cargoes because of draft constraints.

“Export dynamics have slowed down in the past weeks,” said Christian Vanier, FranceAgriMer’s industry coordinator for cereals, at today’s event. “We’re in a decline.”

Stocks of soft wheat will be the highest since the 2004-05 campaign, when end-of-season inventories were 4.77 million tons, based on the outlook. Stocks were 3.1 million tons at the end of the 2008-09 season.

While the grain ports of La Pallice near La Rochelle in southwestern France and Dunkirk in the north can load 60,000-ton vessels, “Rouen is the reference, so it’s not neutral,” Vanier said. “In the short term, we can’t adapt Rouen, it’s really a question of draft.”

Rouen is the port of delivery for the European Union’s benchmark milling-wheat future traded on Liffe in Paris.

Switch to Barley

Exports to countries outside the EU are now forecast to be 8.5 million tons, down from a previous outlook of 8.75 million tons. France, the EU’s biggest grain exporter, sold 9.59 million tons of soft wheat between July 1, 2008, and the end of June last year.

The country had exported 4.3 million tons of wheat to non- EU countries as of Dec. 31, compared with 5.03 million tons a year earlier, according to Michel Ferret, head of market research at the crops office.

Feed use of soft wheat is expected to be 5.4 million tons, less than 5.5 million tons forecast previously as farmers switch to barley, according to the crops office.

France is expected to export more corn in 2009-10 on demand from Spain and the Netherlands, Ferret said. Overall exports of the grain are forecast to be 7.2 million tons compared with a December forecast of 6.86 million tons.

Corn stocks are forecast to be 2.04 million tons at the end of June, compared with a December outlook for stockpiles of 2.24 million tons.

Bloomberg