The EU 2008-09 grain crop forecast has been revised upwards to 308.6 million tonnes, from the September estimate of 305 million tonnes, a Strategie Grains report said Thursday.

 

This is a 20 percent increase on the 2007-08 grain crop and the sixth consecutive rise in the report's monthly forecast.

 

The bulk of the increase on month is from upward revisions to soft wheat production in Poland, the Czech Republic and the UK, seeing total EU wheat output estimates rise to 139.5 million tonnes, said the report.

 

This is up 1.9 million tonnes from September's forecast and a 25-percent rise on the year.

 

However, the analysts first estimates for quality show this year's soft wheat crop had lower protein content levels than the previous crop.

 

"Although the world balance for milling wheat is tight, the balance for feed wheat is heavy," said the report. "On the basis of our analysis of competitive price relationships between the different wheat export origins, we have slightly reduced our estimate for EU exports this month; nevertheless at 15 million tonnes it remains very high."

 

For the EU to increase its competitiveness for wheat for animal feeds both within the bloc and outside it, wheat prices need to fall by around EUR 15 a tonne relative to other origins and grains, said Strategie Grains.

 

Barley 2008-09 production estimates were boosted to 64.96 million tonnes, up 710,000 tonnes from September on increases to yield forecasts for the Baltic rim countries.

 

This is around 13 percent larger than the 2007-08 barley crop of 57.5 million tonnes.

 

Corn production estimates were barely changed from September, up 310,000 tonnes at 60.39 million tonnes, compared with 47.91 million tonnes the previous crop.