New estimated EU corn supply is significantly close

European Commission estimates lower grain harvest – EU - supply situation is close.

The latest estimate of the EU Commission end Aug. 15 on the supply situation on the EU cereals market provides a considerable reduction of inventories by more than 27%. The initial stocks of about 46 million tonnes to 33 million tonnes to be dismantled at the end of the marketing year 2015/16.

The EU cereal harvest by 2015/16 is estimated by the Commission in accordance with State of the art only to 296.6 million tonnes. All previous estimates 300 million t u.m. can withstand not the actual harvest results. However, the International Grains Council has put the EU cereals crop yet to 303 million tonnes in the last week.

The wheat and barley crops are raised slightly by the Commission. Rye and Triticale remain largely unchanged. The original assessment of EU maize harvest of over 65 million tonnes is now on 58.8 million withdrawn t.

The grain consumption will remain unchanged despite the new calculations with 283.3 million. No changes in human nutrition, animal feed and industrial use have been made.

The export should be back in 2015/16 41.5 million tonnes estimated at slightly higher. The import is retained despite missing their own maize amounts almost unchanged with 15.5 million tonnes.

It accounted for the EU cereal offering initial inventory, harvesting and use for domestic consumption and exports imports a deficit of 12.6 million tonnes, leading to a strong destocking to 33 million tons is calculated from.  The closing stock relative to the consumption drops to 11.6% after it has located at 16.3% in the previous year. The long-term average is between 12.5% and 13%. The year 2012/13 had a supply of 10.5%. At that time, the wheat prices were on the Paris stock exchange, well above the €200 per t brand.

A first conclusion can result only in assessing a below-average supply situation in the EU . But the isolation of a region is not sufficient, adequately to assess a worldwide market with its pricing.

The global supply situation including China with its 40% share of supply at world level is 2 percentage points above the multi-annual average. Leaving China due to missing export activities but ignored, turns out that the global supply situation with mobile end stocks compared to the previous year has been reduced.  Given the still critical crops in the maize sector and in the southern hemisphere with the impending El Niño risk one can not assume a relaxed position of supply.  

The current price reductions need to be still corrected in the course of the year 2015/16.

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