EU Grains Mixed As Attention Turns To 2015/16 Production Prospects

26/03/15 -- EU grains closed mixed with May 15 London wheat unchanged at GBP123.65/tonne, May 15 Paris wheat down EUR2.75/tonne to EUR188.50/tonne, Jun 15 Paris corn unchanged at EUR162.00/tonne and May 15 Paris rapeseed up EUR1.50/tonne at EUR367.50/tonne.

SovEcon revised their forecast for the 2015 Russian grain crop up from a previous estimate of 84 MMT to 93 MMT, although that's still down more than 11% on 105 MMT last year.

The IGC estimated the 2014/15 global grain crop at 2 billion tonnes, down 6 MMT in their previous forecast. Production in 2015/16 will fall 3.2% to 1.937 billion tonnes, they predict.

They see the world 2015/16 wheat crop at 709 MMT, down 10 MMT from this season, and consumption up 3 MMT to 711 MMT. Ending stocks are pegged 2 MMT lower than in the current marketing year at a more than ample 196 MMT.

They raised their estimate for the EU 2014/15 wheat crop from 154.9 MMT to 155.6 MMT and lowered industrial usage here from 11.0 MMT to 10.8 MMT, and also cut demand from the feed sector by 1 MMT to 50 MMT.

With exports unchanged from a month ago at 32.1 MMT, that increases ending stocks in the EU at the end of the current season from 15.3 MMT to 16.7 MMT, which is almost double the level of a year ago (8.6 MMT).

They also increased the size of the EU 2014/15 corn crop from 74.5 MMT to 75.1 MMT, although a similar increase in feed usage means that ending stocks are unaltered at 7.3 MMT.

Russia's 2014/15 grain exports were raised by 0.5 MMT to 27.3 MMT, of which wheat will make up 20.3 MMT (unchanged from last month).

Ukraine's grain export potential this season was increased by 1.3 MMT to 35.4 MMT, including 11.8 MMT of wheat (unchanged) and 18.5 MMT of corn (up 0.5 MMT).

Coceral released their first forecasts for grain production in the EU this year, estimating soft wheat production to fall 6.5% to 138.6 MMT.

Speaking at a conference in Ukraine, an FAO agricultural economist predicted that global wheat demand will have increased 12%, and coarse grain usage up by 10%, by 2023.

The US will occupy pole position in terms of supplying this demand, with an estimated 31% of the export market in wheat and coarse grains. By 2023 Ukraine will supply 5% of the world wheat trade, and 12% of the global coarse grain exports, he said.