The European Union has, six weeks into the wheat marketing
year, lost its hope of taking top rank in world exports of the grain for the
first time, thanks to the harvest-time rains which have rendered much of its
crop fit only for feed.
The US Department of Agriculture slashed by 3.0m tonnes to 25.0m
tonnes its forecast for European Union wheat exports in 2014-15, which started
last month, citing "lower quality" grain.
"Excessive harvest-time precipitation in several European
production regions has increased the quantity of feed quality wheat," which was
seen as being mainly consumed within the bloc, rather than exported.
The estimate for EU use of wheat in feed was hiked by 2.5m
The revisions left the EU, typically an abundant source of
milling wheat, largely from France, back behind the US in the world export
league, if by a modest 170,000 tonnes.
The EU has not in any of its guises overtaken the US on
wheat exports (outside the bloc) on records going back to 1960, and fails to do
so even when combined volume totals of the current list of 28 countries is used.
The USDA downgrade came hours after France, the EU's top
wheat producer and exporter, raised its estimate for its soft wheat harvest by 800,000
tonnes to 37.3m tonnes, but warned over "variable" quality thanks to harvest
While "frequent and abundant" rains last month had boosted
growth of corn, which as an autumn-harvested crop is still in its growth phase,
they had "penalised" wheat, with moisture encouraging the sprouting of ripe
kernels, reducing milling characteristics.,
The conditions, accompanied by cooler weather, "has produced
localised quality problems, particularly in the Paris Basin and the east of
France", the French farm ministry said.
Some quality problems had been reported, "particularly cases
of sprouting, which leave Hagberg falling numbers," a key milling specification,
"below levels usually required", the ministry said, if adding that it had no
estimate yet for the amount of grain affected.
'The real problem'
Estimates in the trade indicate that about only one-third of
French wheat will show the Hagberg number of 225 seconds required by the
country's usual export markets in North Africa, with perhaps half of the crop
below the 180 seconds required for any milling uses.
French export prospects have been further clouded by specifications
for delivery against Paris futures which - while standardised last week, easing
some confusion – have been set at levels below those required by many
On Hagberg numbers, for instance, the specifications show a
base of 220 seconds, but a tolerance of levels down to 170 seconds, with minimum
protein at 10.5% and maximum moisture of 15%.
"This is the real problem - when shippers are selling export
cargoes at 225 Hagberg minimum, they do not want bits of 170 Hagberg in the
bulk," traders at a major European commodities house said.
"However, the futures store operators do not want to
restrict deliveries to the silos. Essentially, they are export facilities and
therefore throughput is everything."
UK grain merchant Gleadell said that the revised specifications
"would rule out North African milling markets", and show "the magnitude of the
problem faced by France this season".