INTL FCStone unveiled a downbeat outlook for European Union wheat prices, even as Strategie Grains trimmed its forecast for the 2014 crop, citing lower prospects for the UK.
Strategie Grains cut by 300,000 tonnes to 137.7m tonnes its estimate for the EU soft wheat harvest, the world's biggest, factoring in a downgrade to the UK crop, where heavy storms have meant that "some fields have become waterlogged".
The influential analysis group last week cut by 160,000 tonnes to 15.27m tonnes its estimate for the UK harvest, the EU's third largest.
While a big improvement on last year's 11.9m tonnes, held back by a poor autumn sowing season, the estimate is behind figures from many other commentators, after far more benign planting weather this time.
"This figure is lower than most would quote, including ourselves," traders at a major European commodities house said.
Nonetheless, the Strategie Grains estimate for the overall EU harvest implies an improvement of 3.0m tonnes year on year.
Factoring in 7.7m tonnes of durum, the overall wheat crop, of 145.4m tonnes, would be the EU's third largest ever.
And it should foster a sharp pick-up in year-end inventories to 18.5m tonnes, from 13.3m tonnes at the close of this season, the Paris-based group said.
The estimates were viewed as realistic by Jaime Nolan Miralles, commodity risk manager at INTL FCStone, which itself is pencilling in a figure for EU year-end wheat stocks, including durum, of about 14m tonnes for 2013-14 - well above the US Department of Agriculture figure of 11.7m tonnes.
"Generally, crop condition is very good," he told Agrimoney.com
"And the hardening process is well advanced in Europe, including Western Europe. The winterkill threat is minimal."
The extent of the harvest could potentially raise to E20 a tonne, "or maybe more", from current levels of about E5-7 a tonne, the discount of new crop wheat prices to those for supplies from the 2013 harvest.
And the outlook for prices for old crop hardly appeared bullish, assuming ideas of an end-season stocks figure of about 14m tonnes is correct.
Mr Nolan Miralles said that the higher inventory estimate reflected ideas of growing use of corn, rather than wheat, in livestock feed in the European Union – a trend highlighted in the UK by Agrimoney.com last year.
"Imports from elsewhere in the EU, and Ukraine, are being used as an alternative to wheat," he said, estimating that the bloc's feed use of wheat in 2013-14 could fall to some 49m tonnes.
The USDA, while acknowledging this week that the "European Union continues to shift away from wheat feeding", sees 50.5m tonnes being used in feed rations, while raising ideas of barley rather than corn as a replacement grain.