July 18, 2008

EU to export more wheat to make up for global corn shortage

The EU will need to export 13 million tonnes of soft wheat in 2008-09 to help offset a global corn deficit, according to analytical report Strategie Grains Thursday (July 18, 2008).

This is up from the firm's June report, which called for exports of 11 million-12 million tonnes and 2007-08 exports of 8.8 million tonnes.

Strategie Grains said the higher exports will be needed as the US is not likely to export as much wheat in 2007-08, the report added.

Because of this Strategie Grains does not forecast a large increase in 2008-09 EU ending stocks, despite its projection for an 18 percent on-year increase in EU soft wheat production.

Strategie Grains said prices are likely to stay high due to increased demand, but upward moves would also be limited due to sufficient supplies.

The report warned that prices could come under pressure early in the season, before rising again later in the marketing year if exports reach the projected mark.

Early season pressure could stem from the large EU grain crop, stiff competition from Russia and Ukraine and possible deterioration in EU grain quality, Strategie Grains said.