October 15, 2010

EU's 2010-11 wheat output rise slightly

EU's 2010-11 soft wheat production rose slightly to 127.9 million tonnes, reflecting higher output from Poland, Germany, UK and small cuts to southeastern EU and Baltic harvests, Strategie Grains said Thursday (Oct 14).

The company estimates EU soft wheat output will be 700,000 tonnes higher than its September estimate and down 0.9% compared with 129.1 million tonnes from last year.

The French forecaster says the outlook for EU wheat "remains very tight with high export demand," potential even though the US remains the most competitive source for wheat given its ample wheat stocks that can be used to make up for the shortfall in Russian and Ukrainian wheat exports.

Strategie Grains expects the EU will export 18 million tonnes of wheat in 2010-11, up slightly from its September estimate of 17.4 million tonnes. The UK will export at a "very high level" of almost 2 million tonnes because it remains price competitive relative to France and southeast EU wheat origins, the firm said.

2010-11 Intra-EU exports remained unchanged compared with the September estimate since an upward revision to Polish, Lithuanian and Denmark exports were offset by lower export expectations from the Czech Republic, France and Germany.

From a global perspective, wheat ending stocks are now forecast at a more comfortable 166 million tonnes, partly due to ample US wheat stocks even though a severe drought in the Ukraine and Russia has crimped exports from those two countries.

Within the EU, supply situation remains very tight with soft wheat ending stock estimated at just 9 million tonnes and no feed wheat surplus to spare, the forecaster said.

EU wheat prices will hinge on how tight corn supplies remain, changes to US wheat prices, and 2011 world wheat production.

Strategie Grains expects 2011-12 EU planting area for soft wheat and barley to rise 3% on the year and corn to grow 4%.

Strategie Grains Thursday also revised its total grains forecast up by 1 million tonnes to 275.9 million tonnes due to a rise in barley and wheat output estimates, which largely offset a cut to corn output estimates.