05.
06.14
New EU crop estimate of the European Commission

Getreide Cockpit, 05.06.2014

Bullish
  • Outstanding crop risks
  • high expectations of the EU export
Bearish
  • Early and exceptionally good harvest
  • Location of supply
  • Construction of end stocks.

Commission: submitted again high harvest estimate

In the first June week 2014 has the EU Commission a new harvest estimate for the EU-28 amounting to 301,7 million tonnes (previous year 300,9 million t.) presented. A total range of about 347 million tonnes for the cereals year 2014/15 available is taking into account the high initial stocks.

The wheat harvest is estimated around 3 million tonnes higher at approximately 145 million tonnes. Feed grain to around 2 million tonnes lower, primarily due to a lower maize harvest. Also the barley crops in the EU are not lush.

On the consumption page , 308.7 million tonnes are in 2014/15, approximately 5 million tonnes less than in the previous year. Domestic consumption is classified to 276.5 Mio.t up to 2.5 million tonnes. For it is estimated export to only 32 million tonnes compared with 39 million tonnes from this year, an estimate that perhaps the later correction is needed.

The consumption for direct human consumption and for industrial purposes is changed only marginally. But it is estimated a higher food consumption domestically due to lower imports. Imports will decrease by 7 million tonnes.

The balancing of supply of 2014/15 is a rising closing stock from 33 to 38 million tons. Thus a sufficient stock is, which is available in the case of existing crop risks as buffer reserve available.

The EU-28 is thus predicted an above-average supply situation in the second year in a row. First, that means price pressures, which can already be felt. The year's harvest comes early and is high. For the time being, this ensures harvest pressure.

However, the grain prices in the EU not alone be made, but decided at world level. The EU will be 2014/15 but for the first time world's largest exporter of wheat, because the competitors of United States and the Black Sea region with weaker harvests are waiting. The competitive advantages are but only as long as competitive advantage are guaranteed as export prices. Here, the EU can come up trumps with their qualities of wheat. The United States are too expensive and too far away from the main importing countries on the Mediterranean coast of North Africa. The Black Sea region offers while cheap corn, but of low quality. Also, the political and financial conditions are not well adapted to make steady trades. There will be reserves and hedging practices on the part of the importing countries. In this respect, the EU-28 has a favorable competitive position in the course of the year 2014/15.

New EU crop estimate of the European Commission
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ZMP Live Expert Opinion

The Commission's harvest estimate is largely consistent with other institutions. A second good harvest in a row allowed a tangible inventory build-up, which provides reliable reserve cushion for surviving crop risks.

The current prices are under pressure, the closer the early harvest date. However, the pricing is not only at European level. Worldwide play a number of factors, whose developing today limited until didn't is calculable. The weather phenomenon El Nino can bring in the second half of 2014 some forecasts falter.

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