First impressions can be wrong. Such seems the case with the latest forecasts by US beancounters for European Union wheat.

At first sight, these estimates - the gold standard for global crop markets - look poor fare. A cut of less than 1.2m tonnes, or 0.8%, to the production estimate is far lower than the figures, of up to 4m tonnes, that some analysts have been talking about, highlighting dry weather in France and Germany, and floods in the east.

Romania, after all, cut half that much alone from its own forecast on Thursday. And it is a small grain player.

But the investors who helped Paris wheat rebound from 6% in the red after the data were unveiled to 0.9% by the close may have been on to something.

Reduced competition

Take a global perspective, and the data look much more encouraging. (At least, for those keen on higher prices.)

The modest reduction of 7.5m tonnes to the US Department of Agriculture's world wheat harvest guess belies deep cuts, of more than 11m tonnes, in production by Canada, Kazakhstan and Russia.

That matters. All are major exporters. And bargain basement shipments from Kazakhstan and Russia have had a big impact on depressing world price prices in the last couple of years.

Their reduced presence in exports could take quite some weight off the market.

Picking up the slack

And that looks a blessing in particular for EU growers.

Sure, American farmers are set for a bumper harvest. That will give them plenty to export.

But it is the Europeans who have been better at sealing deals, and proved able to held their own over the last decade against the growing Black Sea competition.

They look set to pick up the slack in export markets once Kazakhstan and Russia have used up their depleted supplies.

Tighter market 

The USDA has recognised as much by raising its forecast for European Union exports, even while cutting hopes for the harvest.

That double barrel of lower output and rising outflows has tightened the EU stocks-to-use ratio on wheat a couple of notches, to below 11%

And it's not difficult to see that metric � a key factor in pricing - tightening further if crops come in anywhere near as weak as some investors are making out. Or if further setbacks abroad lengthen the list of foreign buyers of European shipments.