INTL FCStone underlined increased hopes for Polish and UK
crops as it raised by 3.1m tonnes its forecast for the European Union wheat
harvest, signalling a rebuild inventories.
A monthly trade survey by the broker's Dublin office suggested
an EU wheat harvest of 149.9m tonnes, up from 146.8m tonnes last month's figure,
and of which 142.7m tonnes represented soft wheat.
The upgrade reflected in the main improved hopes for output
in Poland, the bloc's fourth-biggest wheat producer, and the second-ranked UK,
which have missed too much of the rainfall which has depressed quality in France,
the EU's top grower.
The "better definition" now apparent on the quality of harvest
was showing considerably better results from Poland, and Germany, than in
France, FCStone commodity risk manager Jaime Nolan Miralles told Agrimoney.com.
Poland, UK hopes
The broker pegged the Polish crop at 10.6m tonnes, above the
forecast on Tuesday from the US Department of Agriculture of 9.60m tonnes.
Industry group Coceral has pegged the Polish harvest at 9.50m
tonnes, while producers' association Copa Cogeca has put production at 9.24m
The UK crop looks like beating expectations by an even
bigger margin, estimated by the FCStone survey – undertaken of observers from
across the industry, including both producers and processors - at 16.6m tonnes.
That is 1.2m tonnes above the USDA estimate, up 1.0m tonnes
on the Coceral forecast and 1.75m tonnes more generous than the Copa Cogeca
'Yields have been
"We got some very strong results from the UK," Mr Nolan
Miralles said, flagging some ideas of a harvest above 17m tonnes.
"Yields have been robust."
Indeed, a weekly harvest report on Thursday from consultancy
Adas showed results of 8.0-8.2 tonnes per hectare so far, within sight of the record
8.3 tonnes per hectare set six years ago.
However, data from farm ministry Defra have curtailed expectations
somewhat by pegging sowings in England, responsible for the vast majority of UK
wheat output, at 1.791m hectares, down 37,000 hectares on a much-watched survey
undertaken by the HGCA bureau earlier in the season.
"While not a huge change, that would equate to 300,000 tonnes
working on an 8 tonnes-per-hectare yield projection," said David Sheppard, managing
director at UK grain merchant Gleadell.
The strong EU wheat crop, which at 149.9m tonnes would be the
second largest on record, behind only the 2008 result of more than 151m tonnes,
would likely rebuild inventories to the equivalent of "just shy of" 10%
compared with consumption, Mr Nolan Miralles said.
Compared with prices that such stocks-to-use levels have caused
in the past, that "would suggest scope for a little adjustment downward" in prices,
Paris wheat futures for November stood at E171.00 a tonne in
light, afternoon trade on Friday, up 0.2% on the day, and up from E167.00 a
tonne earlier in the month, the lowest for a spot contract since July 2010.