EU Commission estimate (July issue): new grain supply balance 2013/14
In its latest publication, the EU Commission estimates the 2013/14 EU grain harvest at 304 million tons, significantly higher than in previous forecasts. The main reason for the higher result is the improved yield assumptions based on meteorological data from the European MARS system. However, the individual data is not fully comparable with previous years because Croatia was included in 2013/14. This means around 3 million tons more grain on the harvest side and 2.5 million tons more on the consumption side. The balance is within the estimation error range.
The new harvest estimate is automatically associated with a reduction in imports and a possible increase in export potential. In this case, nothing has changed in terms of exports due to the renewed increase in competition from the Black Sea region, but ending stocks are rising. This means a more plentiful supply situation for the EU compared to previous years. Rising closing stocks are therefore always a sign of falling prices.
The result of the estimate is well above the 3 previous years, but does not come close to the very good result of 2009/10. At that time, however, grain prices were at a level of around € 120/t wheat. In the past year 2012/13, an average price of around 210 €/t was achieved, albeit in a wide range from just under 250 at the beginning of the grain year to under 200 €/t at the end.
For the coming 2013/14 year, the supply situation could result in a price range of between € 170 and € 195/t of wheat. In contrast to the previous year, prices will tend to come under pressure during the harvest period, while there could well be potential for increases in the later dates. However, this still depends crucially on the outcome of the global maize harvest and the harvest results in the southern hemisphere.
