December 15, 2012
EU soft wheat exports' forecast this season was raised by Strategie Grains on Thursday (Dec 13), putting them at 18.8 million tonnes, as it factored in reduced supply from rival exporter Argentina and strong demand from Iran.
The latest monthly forecast from the analyst was 1.1 million tonnes higher than its November estimate and meant it had now raised its 2012-13 export outlook by two million tonnes over the past two months.
EU export sales have accelerated since October as supply from rival exporters like Russia has dwindled after poor harvests while weather problems have also deterred importers from turning to upcoming southern hemisphere crops.
EU wheat export licences are running well ahead of last season's pace and last week's volume marked a two-year high.
"In this (world) context, and given the reduction in projected Argentinean exports and strong demand from Iran, we have again increased projected EU exports on the world market to 18.8 million tonnes," Strategie Grains said in a monthly report.
Argentina, a major wheat exporter, is in the midst of a rain-affected harvest that is expected to reduce both volume and quality. Iran, meanwhile, has been buying large volumes of wheat from the EU and other origins, which traders have linked to a lower local harvest and stockpiling in the face of western sanctions.
Strategie Grains' increased EU export outlook included raised forecasts for wheat exports from Germany, Lithuania, Poland and Romania, it said.
The analyst raised at the same time its forecast for EU soft wheat stocks at the end of this season by one million tonnes to 10.4 million tonnes, as the extra export demand was offset by increased EU supply, higher imports and lower animal-feed use. However, the increased stocks level would still be tight.
"Given the finely balanced state of the market (there is absolutely no room for EU wheat to attract any additional demand), the price outlook in the EU remains bullish, especially given the global context, which is also bullish," it said.