European Union wheat stocks will retreat more strongly than previously expected in 2016-17 from the elevated levels expected at the close of this season – which look like being swollen by the biggest French inventories in 17 years.
Strategie Grains cut to 13.3m tonnes its forecast for soft wheat stocks in the EU at the close of the 2016-17 season, which starts in July – and representing a 3.9m-tonne reduction year on year.
The downgrade reflected in part weaker expectations for this year’s EU harvest, the world’s biggest, with expectations of smaller sowings in some parts of eastern Europe offsetting the boost from a mild winter.
“The winter cereals are mostly in good condition in all the EU’s grain producing countries,” the Paris-based analysis group said, but lowered by 500,000 tonnes to 142.6m tonnes its soft wheat harvest forecast.
That took the forecast further below the record 150.2m tonnes reaped last year.
Rebound in exports
EU inventories will also be eroded by improved exports, which Strategie Grains now forecast hitting 30.6m tonnes, 1.7m tonnes more than previously expected, boosted by expectations of weaker competition from Black Sea rivals.
Ukraine is expected by analysts to see its wheat output fall to some 18m tonnes this year, from 26.5m tonnes last year, after a drought-affected autumn sowing season.
The group also lifted its estimate for EU soft wheat exports this season, by 200,000 tonnes, although, at 28.3m tonnes, the forecast remains well below the 33.34m tonnes achieved last season, according to official data.
Strategie Grains said that brisk exports from Baltic countries were offsetting reduced expectations for shipments from France and Germany, the EU’s first and second-ranked wheat producing countries respectively.
Separately, the weakened French wheat exports were underlined too by FranceAgriMer, the official French crop bureau, which reduced by 265,000 tonnes, to 18.20m tonnes its forecast for shipments this season.
The downgrade reflected a 300,000-tonne cut, to 11.0m tonnes, in expectations for shipments outside the European Union, in part offset by an improvement to the estimate for volumes exports within the bloc.
Nonetheless, French soft wheat inventories were now forecast ending 2015-16 above 6.0m tonnes for the first time in 17 years.
France in the first half of 2015-16 exported 7.94m tonnes of soft wheat, a drop of 7.5% year on year, according to customs data.
Shipments outside the EU actually rose by 3.4% to 4.58m tonnes, led by a 70% surge to 2.31m tonnes in exports to Algeria.
However, France is believed to have lost out on some recent Algerian volumes to rival origins including the UK, better known as a shipper of feed wheat but which had a high quality harvest last year.
And prospects for exports to Egypt, the top wheat importer, have faded amidst the confusion over allowable ergot contamination levels which has seen the North African cargo reject a cargo of French wheat.
(Source – http://www.agrimoney.com/news/eu-wheat-stocks-poised-for-rapid-run-down-in-2016-17–9319.html)