EU wheat exports start strongly as war hangs over season

By Michael Hogan and Gus Trompiz

PARIS, July 8 (Reuters) - European Union wheat is beingscooped up at the start of the 2022/23 crop season as importersprofit from a pullback in prices from records and seekalternatives to Ukrainian supplies disrupted by war, traders andanalysts said.

A rare purchase of German wheat this week by Egypt's stategrains buyer, which ramped up direct purchases outsideinternational tenders, underscored how EU wheat is being tappedin the Middle East and Africa to cover the early part of the newseason that started this month.

"The EU looks like having to take a big share of the burdenof replacing Ukrainian wheat this summer," a trader said.

There has been market talk of an unusually large volume ofover 1 million tonnes of German new-crop wheat already sold inadvance, including to Iran and buyers around Africa.

In France, the typically quiet export month of July is setto be much busier as harvesting starts early and core marketslike Algeria and Morocco have fewer options in the Black Searegion.

Morocco's large import requirements, after drought slashedits own harvest, are expected to lead to several hundredthousand tonnes of French wheat being shipped this month,traders said.

Reduced Black Sea trade has also spurred inquiries about EUwheat from buyers in southeast Asia while market chatter thisweek about renewed interest from China, a major outlet forFrench wheat in recent seasons, suggested potential for demandto expand further.

The EU's executive projects record EU soft wheat exports of38 million tonnes in 2022/23.

But some analysts see a record season as unlikely,anticipating exports nearer 30 million tonnes as they cite mixedEU harvest prospects and competition from Russia, which iseasing export taxes to help shift an expected biggest-ever crop.

"The EU supply balance can't really be stretched. So whatroom is there for new destinations?," Nathan Cordier ofconsultancy Agritel said.

The course of the Ukraine war remains the big question mark.

While diplomatic talks to re-open Ukraine's grain portscontinue, the market faces a tangle of Ukrainian grain beingexported via Romania and Poland, and disputed supplies beingshipped from Russian-held zones, traders said.

(Reporting by Gus Trompiz and Michael HoganEditing by Tomasz Janowski)

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