May 13, 2011

EU revises wheat output to 126.4 million tonnes

The wheat production of EU 2010-11 is expected to reach 126.4 million tonnes, rising by 0.4 million tonnes from the previous forecast, Strategie Grains said on Thursday (May 12).

In its May report, the French analyst said there has been very little rainfall in most European countries and yield potentials for wheat and barley have already been affected.

"The situation remains particularly tight in France, UK, Central Europe (Hungary and Poland) and southeast Europe (Romania/Bulgaria). Germany's balance has tightened since last month," Strategie Grains said.

The report said EU wheat stocks on June 30 will remain at a similar level to last month, between 8.5 million tonnes and nine million tonnes; almost two million tonnes less than the minimum stock required to comfortably supply the market from June 30 until the next harvest comes in.

As a result, the likelihood of Russia's and Ukraine's early return to the market has increased, the report said.

However, Strategie Grains revised down EU 2011-12 wheat production by 3.6 million tonnes to 131.5 million tonnes this month.

"West EU countries are the worst affected by the deterioration in yield potentials, while the central European countries have fared better," the French analyst said.

Strategie grains pegs EU corn production at around 54.9 million tonnes in the current marketing year, slightly up on the previous forecast.

Strategie Grains said the corn outlook for 2011-12 was now less heavy than the situation in 2010/11. This price differentiation should therefore narrow, either via a decrease in old crop prices or an increase in new crop prices.