Extra feed use cuts EU estimate for 2015-16 wheat stocks

The European Union cut its estimate for wheat stocks at the end of 2015-16, highlighting improved expectations for feed use of the grain largely at the expense of corn, for which inventories will not fall nearly as far as previously expectations.

The European Commission - revising initial estimates for 2015-16 crop balance sheets released only three weeks ago cut its estimate for soft wheat stocks at the end of the season by 2.5m tonnes to 16.2m tonnes.

The forecast reflected in part a reduced expectation for this year's harvest, trimmed by 400,000 tonnes to 141.08m tonnes on a "usable production" basis.

While the commission did not explain the reasoning behind the production downgrade, it reflected a smaller estimate for area, lowered by 130,000 hectares to 24.24m hectares.

Wheat vs corn

However, the stocks revision reflected in the main an expectation that feed use of wheat would not fall as significantly as had been expected from the 51.9m tonnes in the current season, coming in at 50.0m tonnes in 2015-16.

Previously, the commission had forecast a 48.0m-tonne wheat feed figure, however the grain is proving relatively cheap, in rising by some 2% so far this month on the Paris futures exchange, September basis, compared with a 4% increase in November corn futures.

Indeed, the increased wheat feeding estimate came at the expense of corn, for which animal feed use in 2015-16 was pegged at 59.8m tonnes down 3.0m tonnes on the previous estimate, if up 300,000 tonnes year on year.

The corn revision, and some other more minor changes, fed through into a 3.7m-tonne upgrade to 19.2m tonnes in the forecast for EU corn stocks at the end of 2015-16.

That would still represent a drop of 1.7m tonnes on the figure for the current season's inventories, swollen by a bumper harvest last year.

EU vs other analysts

The reduction in the commission's wheat harvest forecast took it nearer to estimates from other analysts.

Strategie Grains, the influential grains analysis group, earlier this month trimmed its forecast for EU soft wheat output this year by 100,000 tonnes to 140.4m tonnes.

The downgrade by the Paris-based group reflected a reduction of 100,000 hectares to 23.9m hectares in the area forecast.

Last week, industry group Coceral, in its first forecasts for 2015, pegged the EU soft wheat crop at 138.63m tonnes, also on area of 23.9m hectares.

On soft wheat exports, the commission stuck by estimates of 27.09m tonnes in 2015-16, a large drop from the 31.0m tonnes forecast for this season, and below a CWB forecast made last week.

Rapeseed estimates

On rapeseed too, the commission, in lifting its forecast for EU output this year by 190,000 tonnes to 21.34m tonnes, came closer to the other analysis groups.

Strategie Grains on Monday lifted by 370,000 tonnes to 21.93m tonnes its forecast for EU rapeseed output, citing higher estimates for both area and yield.

Coceral last week pegged EU rapeseed production at 21.62m tonnes.

Rapeseed crops are seen has having reached the spring largely in decent condition, after a reasonably benign winter, and with ideas of large insect damage, following the banning of a popular insecticide, having retreated too.

Source: http://www.agrimoney.com/news/extra-feed-use-cuts-eu-estimate-for-2015-16-wheat-stocks--8136.html