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Supply Chain

Strategie Grains Lowers Forecast For EU Wheat, Barley Harvests

Adverse weather in the European Union has sharply reduced prospects for wheat and barley harvests, contributing to a potentially 'explosive' global supply outlook for the cereals, analyst firm Strategie Grains said.

In a monthly report, the French firm reduced its forecast for 2021 soft wheat production in the 27-country EU by 1.5 million tonnes to 131.5 million tonnes.

Wet weather in the run-up to harvesting had led to disappointing yields in France and Germany while high temperatures in June had lowered yields in Poland and northern Europe, Strategie Grains said.

The revised EU soft wheat crop forecast would nonetheless be 12.7 million tonnes above Strategie Grains' estimate of last year's output.

Harvest Prospects

But the downgrade comes as harvest prospects have also deteriorated in other exporting zones like North America and the Black Sea region.

Strategie Grains reduced its projection of world wheat production, including durum, by 14 million tonnes to 750.3 million tonnes.

Despite high prices and the spread of the Delta coronavirus variant, global wheat demand was expected to expand in 2021/22. This could contribute to the stocks-to-use ratio in major exporting countries falling to its second-lowest level on record after 2012/13, Strategie Grains said.

Forecast EU soft wheat exports in 2021/22 were raised by 1.7 million tonnes from last month to 32.7 million tonnes, despite mixed quality in the EU harvest, the firm said.

The share of livestock feed-grade crop in the soft wheat harvest was expected to be higher than last year, reflecting the impact of heavy rain, it said.

Global Barley Output

Projected EU barley production was lowered by 2 million tonnes from July to 53.0 million tonnes, contributing to a 7 million tonne cut to Strategie Grains' forecast of global barley output.

With drought ravaging crops in major exporter Canada, the market was facing "explosive situations for barley and wheat", putting the onus on maize (corn) to pick up additional demand for livestock feed, it said.

Forecast EU maize production was raised to 66.3 million tonnes from 65.7 million in July. Rain has boosted crops in France, Germany and Poland, offsetting reduced prospects in Hungary, Romania and Bulgaria due to dryness, it said.

In June, the European Commission trimmed its forecast of usable production of common wheat in European Union's 27 member countries in 2021/22 to 125.8 million tonnes from 126.2 million estimated last month.

News by Reuters, edited by ESM. For more Supply Chain stories, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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