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Strat Grains lifts 2014-15 EU wheat export hopes

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The European Union will enjoy a strong 2014-15 for wheat exports, despite diminished harvest expectations, with Strategie Grains raising by 1.2m tonne its forecast for shipments.

The French-based analysis group lifted to 21.7m tonnes its forecast for EU soft wheat exports in the season starting in July.

While lower than the 24.3m tonnes expected for this season - reflecting ideas of growing supplies in many major exporting countries, including within the former Soviet Union which represents a key competitor to the EU - it is nonetheless a historically high figure.

It would beat volumes recorded in any of the last five seasons.

The EU typically exports some 1m-1.5m tonnes of durum wheat, the type used in making pasta, on top of the soft wheat volumes.

Better production

The upgrade reflected expectations of buoyant import demand for imports by sub-Saharan Africa, besides rising trade into South America, still grappling with successive seasons of poor Argentine production, and to South East Asia.

And it came despite a small cut, by 200,000 tonnes to 137.5m tonnes, in the estimate for the EU soft wheat harvest this year, with winter wheat seedlings in much of the bloc challenged by poor winter weather, although Strategie Grains focused on frosts in the Baltic states rather than floods in more westerly area.

Even so, at 137.5m tonnes, the EU harvest will be a strong one – reaching 145.1m tonnes including durum, the third largest on record.

The analysis group saw soft wheat stocks rising from 13.1m tonnes to 15.8m tonnes over 2014-15, if a figure down 2.7m tonnes down on its previous estimate.

In 2013, the soft wheat harvest reached 134.6m tonnes, with a further 7.7m tonnes of durum, Strategie Grains estimates.

But hopes for this year have been buoyed by increased autumn sowings, after heavy rains disrupted plantings a year before, lifting total area to an estimated 800,000 hectares to 24.0m hectares.

French reassurance

The export upgrade represents the second reassurance in two days for merchants, after FranceAgriMer defied expectations and stuck by a forecast that France, the EU's biggest player in wheat, will ship 11.5m tonnes of soft wheat this season despite concerns over trade with Egypt, the top importing country.

Egypt's Gasc grain authority has tightened, to 13.0%, restrictions on the level of moisture it will accept in wheat exports, a measure which looks like catching out the bulk of French shipments.

However, "Algerian and Moroccan demand could compensate for what we won't be able to do in Egypt," Olivia Le Lamer, the head of the FranceAgriMer grains unit, said.

She added that Gasc's 13% moisture ceiling on wheat imports "doesn't close off the Egyptian market to French wheat", although it "makes things more costly and complicated".

Resilient UK imports

Separately, customs data on Wednesday showed that the UK market remains a ready wheat import market within the EU.

UK imports for December surprised many observers by rising month on month, raising ideas that last year's harvest may have been smaller than thought, while corn buy-ins hit their highest in at least 22 years.

By Agrimoney.com

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