The 59 percent drop in French wheat shipments in the past two months means no return to panic buying from northern African nations and a 25 percent slump in freight costs in the third quarter.

Shipments from Rouen, France's biggest grain hub, fell to 99,585 metric tons in the week ended May 25, from 242,187 tons at the end of March, port data show.

Third-quarter rates for handysizes, the ships most commonly used at Rouen, will drop to $8,600 a day, from $11,526 now, said Martin Korsvold from Pareto Securities AS, whose ratings on shipping lines returned 16 percent in a year.

Investors are anticipating no such decline in wheat, with futures on the Chicago Board of Trade, a global benchmark, predicting rising prices for at least two more years.

European farmers are contending with the driest growing season in three decades and there is drought in parts of China and the U.S.

At the same time, Russia and Ukraine are easing export curbs and harvests from Egypt to Morocco are forecast to expand. Northern African nations can also rely on stockpiles built up at the start of this year as they sought to quell riots that erupted as food prices rose to a record.

"They bought enough in January and February to see them through to the harvest," said David Eudall, an analyst at the Home-Grown Cereals Authority, an industry-funded crop researcher in Kenilworth, England.
 
 
Source: mb