US officials raised the bar on forecasts for the European Union wheat harvest, seeing another crop above 150m tonnes, and were upbeat over exports too – provided former Soviet Union competition does not prove too great.
US Department of Agriculture foreign staff, in their first estimate, pegged the EU wheat crop, the world’s biggest, at 151.0m tonnes this year.
While down 5.4m tonnes on last year’s all-time high, according the USDA staff estimates, that would be the second largest crop on record.
The figure was also larger than forecasts from other commentators such as Strategie Grains, which forecasts the harvest at 148.3m tonnes including the durum wheat used to make pasta, while the European Commission has unveiled a 149.2m-tonne estimate.
Reasons for optimism
“A number of factors are currently pointing towards a good [grains] harvest, both in terms of size and quality,” the USDA staff said in a report, highlighting factors including a benign autumn planting season in most countries, and expectations of low rates of frost damage during the winter.
EU wheat harvest forecasts for 2015
USDA attaché report: 151.0m tonnes
European Commission: 149.2m tonnes
Strategie Grains: 148.3m tonnes
Coceral: 146.2m tonnes
“A mild winter across much of the EU has seen [wheat] crops develop well with minimal winterkill,” the briefing said.
Indeed, with the crop having “experienced relatively good over-winter conditions and a positive start to the spring, there is upside potential for yields”, with the extra pest pressures encouraged by mild weather one potential threat.
“There are some concerns regarding increased pest and disease occurrence, notably in Austria and the Nordics.”
However, EU wheat exports in 2015-16 will fall only 1.0m tonnes from the record 32.5m tonnes expected for this season.
The 31.5m-tonne forecast compares with a more downbeat expectation of 28.3m tonnes from the European Commission.
“EU wheat exports in are forecast to remain high, with Middle Eastern demand remaining strong,” the USDA staff said, adding that Egypt, the top importer of the grain, is “forecast to remain a significant destination” for French supplies.
That said, “much will depend on the Ukraine situation”, the report added, highlighting questions over the Black Sea country’s “physical ability to export”, at a time of internal turmoil, “as well as the quality and availability of its grains crop.
“If it is of a good quality and there are not disruptions to its export business then [Ukraine wheat] could compete for market share with EU wheat later in the season,” the report said.
“Another factor will be whether Russia removes or extends its export tax,” with a decision due in May or June, the farm ministry said last week.
Stocks to drop
The prospect of another strong season for wheat exports from the EU – which is seen overtaking the US this season as the world’s top shipper this season – coupled with increased feed demand from the likes of Poland, will see the bloc’s wheat stocks fall despite the historically strong harvest.
Inventories were seen dropping 500,000 tonnes to 15.9m tonnes over 2015-16.
The stocks-to-use ratio, a key measure of the availability of crop supplies, and therefore seen as a guide to pricing prospects, will drop 0.6 points year on year to 12.7%, although remain well above the 8.6% figure seen in 2013-14.
The forecasts come ahead of a May 12 USDA report which will reveal the department’s first official forecasts for world crop supply and demand next season.
(Source – http://www.blackseagrain.net/novosti/us-officials-lift-bar-on-eu-wheat-forecasts-for-2015)