The International Grains Council, in one of the first attempts
to quantify the damage to European wheat from harvest-time rains, forecast a
jump in feed use, as it lifted its estimates for world grains production.
The intergovernmental group, raising by 2m tonnes to 699m
tonnes its forecast for world wheat consumption in 2014-15, said that the upgrade
was down to raised expectations for use of the grain in livestock feed.
"This is mostly in the European Union, where harvest quality
has suffered from untimely rains," the council said, raising by 2.0m tonnes to
49.5m tonnes its estimate for bloc's feed consumption for the season.
That represents a rise of 14% year on year, albeit in line
with historical levels, and reflects the setback to quality from late rains
which, in encouraging sprouting in ripe grains, are rendering much EU output,
particularly in top producer France, fit only for animal feed.
Indeed, the IGC also noted that even though wheat prices
overall have fallen some 6% this month, "top-grade milling quotations were
underpinned by reports of quality problems in some areas".
Separately on Thursday, ADM Germany, formerly known as Toepfer International, underlined that French wheat was unlikely to meet quality specifications for meeting orders from Algeria, a major buyer of French supplies, prompting purchases from Germany and Poland to fill the void.
The rains have not, however, threatened
quantity, with the IGC nudging higher its forecast for the EU wheat crop to 147m
However, the main cause of an upgrade to 702m tonnes in the
estimate for world wheat production was a 4.0m-tonne increase, to 55.0m tonnes,
in the estimate for Russia's harvest.
And this estimate, including Crimea, could yet be raised
further once more is known of the spring wheat crop, IGC analyst Amy Reynolds
said, noting some estimates from other commentators above 60m tonnes.
"The results of the wheat harvest have been pretty good so
far, but there are still some question marks," Ms Reynolds told Agrimoney.com.
The comments came as the IGC lifted by 10m tonnes to 1.959bn
tonnes its forecast for global grains production in 2014-15, reflecting a 6m-tonne
upgrade to the estimate for world corn output, besides the increased wheat
The council cited "favourable conditions for developing
northern hemisphere crops, most notably in the US", the top corn producer.
The impact on world grain inventories will be an increase of
18m tonnes year on year to 419m tonnes at the close of 2014-15, a 15-year high,
and an increase down in the main to surging corn stocks.
Global corn inventories will rise by 18m tonnes to 187m
tonnes over the season, 7m tonnes more than expected last month.