• Rising North African demand, competitive prices boost sales
  • Farmers still holding big wheat supplies after record harvest

French wheat stockpiles will be much smaller than previously forecast as exports accelerate and as farmers hold back grain in hopes of higher prices.

Supplies available to the market at the end of June may total 3.86 million metric tons, 29 percent less than estimated last month, crops office FranceAgriMer said in an online report. The figure excludes supplies held privately by farmers. France, the European Union’s biggest wheat grower, harvested a record crop of 40.9 million tons this season, according to the report.

French wheat exporters are benefiting from increasing demand from Morocco, where severe drought slashed the harvest by 70 percent, according to the government. French prices are also competitive against other major exporters including the U.S. and Russia. French soft wheat exports in the 2015-16 season may total 19.37 million tons, about 4 percent more than estimated in April and near the record 19.41 million tons shipped the prior season, according to FranceAgriMer’s report.

“French wheat for several weeks already has been highly competitive, more or less at the lowest-priced level in the world,” Wibke Baars, a consultant at French farm adviser Agritel, said by phone from Paris. “There has been quite a lot of demand from the intra-EU region, Morocco and other countries in northern Africa.”

The price of French milling wheat from the port of Rouen was about $167 a metric ton on Friday, more than $20 cheaper than comparable Russian supplies, according to data from FranceAgriMer and SovEcon. Milling wheat futures in Paris fell to a five-year low in February because of surging supplies of grain worldwide.

While cheap French wheat prices have been a boon for exports, they’re also making farmers more reluctant to sell. About 2.57 million tons of wheat will be stored on French farms by the end of the 2015-16 season on June 30. That’s 55 percent more than estimated in April, and triple the amount held a year earlier.

“At the price levels we have seen in recent months, they don’t have incentive to sell their crops,” Baars said. “If they can keep it, they will keep it until prices are better or until they need the cash.”

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