Strategie Grains underlined ideas of Europe performing
strongly in wheat exports next season, but said that the prospect for prices
was "rather bearish" nonetheless, undermined by the competitiveness of corn for
The influential analysis group lifted its forecast for
European Union soft wheat exports in 2014-15 by 1.4m tonnes to 24.3m tonnes - a
figure it has now raised by nearly 4m tonnes in four months, and which would be
a record high were it not for the strong performance this season.
Indeed, Strategie Grains upgraded its estimate for shipments
this season by 1.3m tonnes to an all-time high of 28.1m tonnes, highlighting
increased ideas of demand from Africa, and from Iran and Turkey - two countries
where drought has hurt prospects for this year's output.
"EU soft wheat exports have partly met this increased
demand," the Paris-based group said.
"German exports have increased considerably due to demand
from Iran," which US Department of Agriculture analysts believe is on course
for a 1.5m-tonne cut to 13.0m tonnes in wheat output this year.
However, Strategie Grains nonetheless lifted its forecast for
EU soft wheat stocks at the close of 2013-14 by 1m tonnes to 14.7m tonnes.
The upgrade to export hopes was more than offset by a 2.7m-tonne
cut to 112.5m tonnes in expectations for feed use, as livestock producers
switch to lower-priced grains.
Wheat has "lost competitiveness compared with maize", the group
said, raising its forecast for this year's EU corn crop by 700,000 tonnes to 65.9m
tonnes, a rise of 1.5m tonnes year on year.
While prospects for world wheat supply and demand in 2014-15
appear "balanced", the EU outlook looks "much more comfortable", the group said,
adding that prospects were "overall rather bearish for EU [wheat] prices".
US vs EU
The forecasts follow a forecast by the USDA on Friday that
the EU will next season overtake the US in all-wheat exports for the first time
to become the world's top shipper.
US exports themselves are being undermined by drought damage
to the hard red winter wheat crop, a factor which Strategie Grains said could
yet lead it to lift further its estimate for EU shipments if further demand
cross the Atlantic.
The group estimated the total EU grains crop this year at
298.8m tonnes, up 900,000 tonnes from its previous estimate but below the 302.0m
tonnes achieved last season, reflecting largely weaker expectations for rye