June 15, 2006

 

Strategie Grains increases 05-06 EU wheat ending stocks forecast

 

 

Strategie Grains, a monthly analytical report released Thursday (Jun 15), made an upward revision to its 2005-06 ending stocks forecast for EU wheat.

 

The June report increased its figure by 550,000 tonnes, to take account of a rise in imports and a reduction in exports to third countries.

 

This puts the new figure for wheat closing stock on Jun 30 at 17.3 million tonnes.

 

"Projected closing stock has increased since last month and intervention 2005-06 is now closed: the balance shows an open market surplus for France and Germany, in particular, which appears to be larger than was the case a month ago, Strategie Grains said.

 

In the case of France, this corresponds to intervention stocks sold for export, which would not be physically exported until after Jun 30.

 

In Germany, the rise in open market stocks stems from the release of intervention wheat back onto the open market.

 

However, its May estimates said total 2006-07 EU cereal production would be down 1.8 million tonnes to 263.1 million tonnes.

 

The figure is up 3 percent from last season's crop.

 

The largest reduction was in soft wheat. Strategie Grains now lists EU soft wheat output at 118 million tonnes, which is down 800,000 tonnes from the May estimate, but up 3 percent from the 2005-06 crop.

 

Yield potentials for wheat and barley remain good in most EU countries, despite high temperatures in Spain that have already provoked some instances of grain scald, according to the report.

 

Weather at the end of June is now anxiously awaited because of its crucial impact on grain filling and quality. There is a risk of grain scald in France, the report said.

 

In Spain and Italy, the harvests have already begun. In France, harvesting begins at the end of June with barley.

 

EU corn output was forecast at 49.3 million tonnes, down 300,000 tonnes from the May figure, and down 2percent on the 2005-06 harvest.

 

"So far, weather conditions have not been optimal for corn development, mainly because temperatures have been on the cool side: we are counting on the plants' capacity for rapid growth in warmer conditions to offset these early delays," said Strategie Grains.

 

Corn output in Greece, Poland and Hungary has been revised down for this month, outweighing upward revisions for Italy, Czech Republic and Slovakia.