Narrow supply situation with grain in the EU

The grain supply in Europe could decrease this season despite the corona-related lock-downs, as barley continues to be exported to China and domestic wheat has to compensate for lower corn imports, Strategy Grains said.
In its monthly report, the analyst company lowered its forecast for corn imports into the European Union and Great Britain in 2020/21 by almost 2 million tons to just under 17 million tons. This is due to the higher prices on the world market, caused by a disappointing Ukrainian harvest and high Chinese demand.
The forecast for wheat imports has also been lowered as Ukrainian wheat has become less competitive in the EU. Meanwhile, more wheat from domestic production is being used as fodder, according to Strategy Grains.
In order to meet the EU's feed requirements and because less grain is imported, the supply in this country is becoming even scarcer. Even if the second lock-down to contain the novel coronavirus reduces consumption.
Its wheat flour demand forecast lowers Strategy Grains by 900,000 tons while demand for brewing barley has decreased by 600,000 tons, Strategy Grains said as consumption in restaurants and snack bars is falling.
Due to the fact that China's demand for EU barley rose by 400,000 tons to 7.4 million in 2020/21, this market in the EU has been cleared. In Great Britain and Spain there is still a surplus of barley, which is not yet on offer.
The forecasted common wheat exports from the EU and Great Britain were reduced from 25 million in October to 24.3 million tons. The analysts conclude that EU wheat prices must lose competitiveness abroad in order to maintain sufficient stocks in Europe.
The wheat acreage for harvest in 2021 estimates Strategy Grains 9% higher than this year. If Russia then produces more grain again in the coming year, the tight supply situation could ease.

Hansa Terminhandel GmbH
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