July 17, 2012

EU 2012 cereal harvest may slightly increase

As the usable production reaches 286 million tonnes, EU 2012 cereal harvest is expected to be slightly higher (0.6%) than in 2011, thus leaving the cereal balance tight for the marketing year 2012-13.

During 2011-12 cereal supplies slightly exceeded demand, but not sufficiently to ease the tight balance, leaving the stock- to-domestic-use ratio at 13.6%. In oilseeds and protein crops, the 2012 harvest is expected to decline to 18.8 million tonnes for rapeseed (down from 19.2 million tonnes), eight million tonnes for sunflower seed (down from 8.4) and 2.5 million tonnes for protein crops (down from 2.7 million tonnes).

The 2011 cereal harvest reached a usable production of 284.7 million tonnes due to the favourable yield development mainly in corn (+8.7%). During the marketing year 2011-12 imports of common wheat were high due to the lifting of the export ban in Russia and of export quotas in the Ukraine.

EU soft wheat exports were considerably lower than in previous years, leaving expected 2011-12 net exports at 8.6 million tonnes compared to 17.7 million tonnes in the previous campaign. Net imports of corn are also expected to fall to two million tonnes in the 2011-12 marketing year, down from 5.3 million tonnes the year before.

Animal feed use of total cereals is expected to slightly decrease to 167 million tonnes, resulting in an almost unchanged domestic use at 271.4 million tonnes. Consequently, cereal stocks will be slightly higher, but remain at a low level of 36.9 million tonnes or 13.6% of domestic usage. Intervention stocks are negligible.

In 2012, the EU cereal harvest is expected to be slightly higher than in 2011, with a usable production of 286 million tonnes (up 0.6%). The most considerable change is expected in barley, with usable production increasing by 4.2 million tonnes to 55.5 million tonnes. Both soft wheat and corn harvests are expected below last year, with usable production at 126.1 and 66.8 million tonnes respectively (down 1.9% and 1.2%); however in the case of corn harvest is considerably above the last five-year average.

The overall slight increase in availabilities might not be enough to cover the increase in demand for cereals. Consequently stocks might even decrease slightly, thus leaving the overall balance tight, with a stock to domestic use ratio of 13.6% at the end of the season 2012-13.

Despite the exceptional development in sunflower seed production in the 2011 harvest, with an increase of 20% to 8.4 million tonnes, total EU oilseed production only increased marginally to 28.9 million tonnes (+0.6%) due to lower rapeseed production. Lower imports of soy, at 11 million tonnes in 2011-12 compared to more than 13 million tonnes in 2010-11, reduced expected crushing of oilseeds in 2011-12 by 1.2 million tonnes.

Imports of oilmeals are expected almost unchanged at 24 million tonnes, thus reducing the availability of oilmeals for animal feed by 2% to 48.1 million tonnes. The reduction in the domestic use of the main vegetable oils is expected to be even more pronounced (down 4%) as imports are expected 7% lower. The 2012 oilseeds and protein crops harvest are expected to be lower for all crops with the exemption of linseed, mainly due to reduced plantings. In rapeseed, considerable winter kill occurred in the major production regions. The expected production is now at 18.8 million tonnes for rapeseed (down from 19.2 million tonnes) and at eight million tonnes for sunflower seed (down from 8.4). Protein crops are expected to decline to just 2.5 million tonnes of production in 2012, down from 2.7 in 2011 and 2.9 in 2010.