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GFMM desk: The U.S. Department of Agriculture (USDA) predicts that wheat exports to the EU will increase to 28 million tonnes, mainly due to the large crop recorded in the October report on the global grain market and its trade. Overall growing conditions in the region were favorable this year, resulting in 152.0 million tonnes of production, which is 15 million tonnes higher than last year due to drought.
As predicted, in the presence of significant supply of supplies, exports will be restored at competitive prices with other wheat suppliers, restoring world trade and adequate supply of local grains, the report states.
European wheat prices are now more competitive with Russia than last year's prices. European Union exports were competitive in the first months of the 2019-2020 season, as Russia's total supply was low, which offset some of the larger harvest. This contrasts with last year's situation when Russian exports were moving fast, and EU wheat struggled to reach many regional markets.
According to the USDA, total global trade is expected to recover this year, and the European Union will be able to capitalize on this emerging wave. When expenditure fell due to tightening of global availability, world trade is projected to increase by around 5 million tonnes over the 2018-19 season. With Russia's supply limited overall, it is expected that the European Union and Ukraine will be the main beneficiaries of the larger global wheat trade.
FranceAgriMer's firm sharpened its forecast for French soft wheat exports this season, pointing to optimism among traders that a larger crop and competitive price would allow France to expand overseas sales. In forecasting supply and demand, the company raised estimates for French soft wheat exports outside the European Union in 2019-2020. In the last month, it increased from 11 million to 11.7 million tonnes. The revised forecasts for 2019-20 are up about 14% over last season and could be four years higher. This forecast captures price expectations below the market. "We have a rather conservative outlook compared to some exporters," Marion Duval, deputy head of the FranceAgriMer Crop Department, told reporters.
Source: Online/SZK
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