A record European Union wheat harvest that beat expectations will boost stockpiles in the world’s biggest grower to a seven-year high.
Usable production of soft wheat, used for bread and to feed livestock, will increase 0.3 per cent to 149.2 million metric tonnes in the 2015-16 season, according to European Commission data published online Tuesday. That reversed a September outlook for output to drop 2.8 per cent.
The bumper crop in the region, which accounts for a fifth of world output, was aided by a mild winter and sufficient spring rain in northwest Europe, and helped push wheat traded in Paris down 10 per cent this year. The commission expects soft-wheat inventories in the region to climb 60 per cent from a year earlier to 17.6 million tonnes by the end of June. The International Grains Council predicts global stockpiles will rise to the highest in 29 years.
“We have very good supply of wheat in the EU, we also have very good supply globally,” said Stefan Vogel, head of agricultural-commodity research at Rabobank in London. “We now have stocks at very high levels.”
Higher Stockpiles
Inventories in the 28-country bloc are set to climb even as the amount of wheat fed to animals gains 2.1 per cent to 53.5 million tonnes, according to the commission. The outlook for the amount of corn used to feed livestock and poultry was cut by 1 million tons to 61.3 million tonnes.
The region’s corn production is expected to slide 26 per cent from last year’s record to a four-year low after summer drought and heat hurt spring-planted crops. Output will total 57.4 tonnes, about 1.1 million tonnes less than predicted in September.
Given the drop in the corn harvest, “we will see record wheat-feeding in the EU this year, especially in countries like France and Poland and Germany,” Vogel said.
EU soft-wheat exports are set to slump 16 per cent to 27.9 million tonnes, a three-year low, partly due to reduced purchases by major buyer Morocco. The pace of EU soft-wheat export licenses in the season that started 1 July has trailed last year, reaching 6.84 million tonnes as of 27 October compared with 9.79 million tonnes as of 28 October last year, commission data show.
Exports will start to pick up in November, Vogel said. France, Romania and Poland won a wheattender by Egypt’s state grain buyer on 29 October. It was the first time since July that neither Russia nor Ukraine sold to Egypt through a tender.
Wheat traded in Chicago has gained about 10 per cent since early September, partly amid concern that dry weather in Russia and Ukraine may damage the next harvest.
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