Agricultural consultancy Strategy Grains has raised its forecast for common wheat stocks in the European Union significantly at the end of this season as lower domestic demand during the coronavirus crisis outweighed the improved export prospects.
In the monthly report, the French-based company raised its forecast for EU common wheat stocks at the end of the 2019/20 season on June 30 from 12.5 million tons in March to 13.7 million tons.
Weaker demand within the EU, including a 1.3 million ton downward correction in the milling industry, reflects the contact closures to counteract the corona virus, which has hit out-of-home consumption in particular, strategie Grains said.
The deteriorating prospects for plant-based biofuels due to the slump in fuel demand and oil prices also led the company to lower expected wheat consumption in ethanol.
The forecast for EU common wheat exports this season has been increased from 31.2 million tons last month to 32.4 million tons.Strategy Grains pointed to continued buoyant overseas demand and the limited disruption to trade flows due to the coronavirus crisis.
The burden on overall demand is likely to continue in the next season, with soft wheat stocks expected to be at a similar level to 2019/20 at the end of 2020/21, despite the prospect of a much lower EU harvest, according to the consulting firm.
The forecast for common wheat production in the EU in 2020/21 was lowered by 1.7 million tons to 135.0 million tons, which is a decrease of almost 8% compared to the previous year, since the estimated acreage after the poor sowing conditions was further cut in northwest Europe.
Source
Hansa Terminhandel GmbH
