Poor EU harvest to shrink wheat stocks, swell maize imports-analysts
Weather-hit cereal harvests in Europe will lead to tight wheat supplies in 2018/19 and leave the region reliant on record imports of maize to feed its livestock herd, analyst firm Strategie Grains said.
Drought and heatwaves since late spring have withered crops in northern Europe, and French-based Strategie Grains on Thursday made another steep cut to its European Union soft wheat production forecast, now seen 10 percent below last year’s level.
The drop in harvest supply and high market prices led it to reduce its projection of EU wheat use for livestock feed in 2018/19 by 3.1 million tonnes from a month ago to 47.6 million tonnes, and to lower its 2018/19 EU soft wheat export forecast by 1.2 million tonnes to 19.8 million.
However, this would still lead to “an untenably tight situation” with end-of-season stocks at 9.5 million tonnes, Strategie Grains said, arguing that the market would therefore need to reduce potential demand, notably in exports.
With the barley market also facing a tight supply situation, the EU would need to use as much maize (corn) as possible to meet livestock feed requirements, the analyst firm said.
Strategie Grains revised up projected maize use by 2.8 million tonnes from a month earlier to 61.3 million tonnes, adding it saw little further scope to increase maize’s share in feed rations.
This extra feed demand would imply very high imports, it said, projecting EU maize imports would reach a new record of 19 million tonnes, up 1.5 million from an already-record volume expected in 2017/18.
The high import forecast was despite a slight upward revision to Strategie Grains’ EU maize harvest estimate, which it said reflected good growing conditions in countries such as Romania offsetting hot, dry weather further north.
Source: Reuters (Reporting by Gus Trompiz and Valerie Parent; Editing by Dale Hudson)