EU corn crop seen up; increased wheat forecast for 2010

 

 

Analyst Strategie Grains raised on Thursday (Jan 21) its monthly estimate of this season's EU's corn crop by 720,000 tonnes to 56.8 million tonnes.

 

The estimate change mainly reflects upward revisions for Romania, Austria, France, Spain, Portugal and Hungary, the French analyst said in its monthly update.

 

In November, Strategie Grains had slashed its corn crop forecast by 730,000 tonnes to 56.2 million tonnes due to lower estimates for France, Hungary and Romania.

 

On Thursday, Strategie Grains also raised its monthly estimate for non-EU corn imports by 180,000 tonnes to 3 million tonnes, citing the increased competitiveness of third country corn, essentially Brazil's, in south EU import destinations.

 

This implies a rise of 900,000 tonnes in estimated supply while demand is steady month on month, but Strategie Grains said surpluses were split almost equally between several countries and were relatively small, which should be neutral for prices.

 

"The impact of this situation of this situation on European corn prices is neutral rather than bearish, meaning EU prices will be subject to the influence of external factors," it said.

 

Strategie Grains also raised its monthly estimate of next year's EU's soft wheat crop by 380,000 tonnes, now forecasting a production of 133.7 million tonnes in the 2010-11 season.

 

According to the analyst, the slight rise reflects upward revisions in areas sown with soft wheat in Romania and Germany, basing its forecasts on the trend yield value for each of the European bloc's 27 countries.

 

The estimate therefore has a variation potential of at least 10 million tonnes on the upside or downside depending on weather conditions in coming months, the analyst said.

 

The brutal change in temperatures between the start of the year - marked by intense cold and frost - and the current mild weather spell should be watched over, Strategie Grains said.