France’s Top Grain Coop Sees Brisk Wheat Exports Next Season

  • Exports will start stronger, earlier next season: Axereal CEO
  • French wheat production has potential to be near 2015’s record

France is set to continue the quick pace of wheat exports into next season, with low freight rates and large stockpiles helping increase overseas sales, according to the nation’s largest grain cooperatives.

Shipments will probably start earlier than last year and exports to unusual destinations including countries in Asia will continue, Philippe de Raynal, chief executive officer of Axereal, said in an interview from Paris on Friday. After slow shipments at the start of the season, overseas sales picked up and are now expected to reach a record at the end of the month, according to FranceAgriMer.

Wheat exports from France, the European Union’s biggest producer, stepped up this season after the bulk of exports were shipped from the Black Sea region, where grain was more competitive at the beginning of the season. 

"Last year, we started slowly and we finished the season very strong,” said de Raynal, whose cooperative markets 5.5 million tons of grain a year and grows grain mainly in the center of France. “I imagine we will continue very strong. We need to have stocks that globally are lower than what we have today."

French Exports

France’s wheat exports will climb about 3 percent to 20 million metric tons in 2015-16 as lower prices and a weaker euro helped make French grain cheaper than supplies from the Black Sea towards the end of the season, FranceAgriMer estimates. Milling-wheat futures fell 0.4 percent to 173.25 euros ($194) a ton on Euronext by 1:52 p.m. in Paris.

Inventories are still expected to be massive, ending the season 36 percent higher than the five-year average, FranceAgriMer estimated last week. Stockpiles will total 3.5 million tons, according to the crops office.

Low freight rates led France to ship wheat farther this season and that will continue in 2016-17, according to Axereal. Rouen, France’s biggest grain export port, loaded last year its first cargo to Indonesia since 2008. Exports were also registered to countries including Thailand and Mexico, data from the port showed.

Heavy rainfall over France has hit grain the most in the eastern part of Axereal’s growing areas. While it’s still not possible to assess the damage, the crop had the potential to be near 2015’s record, he said.

French wheat areas received on average more than twice as much rain than normal in the past 30 days, Speedwell Weather Ltd. said in a report on Monday. The wet weather means that some plants have fallen over, a phenomenon known as lodging, but only in very specific areas, according to Axereal.

Before it's here, it's on the Bloomberg Terminal.