European Union soft wheat stocks will end this season at their largest in 13 years – and will expand even further next season, officials said, cutting export hopes in the face of better-than-expected Ukrainian spring sowings.
The European Commission lifted by 1.43m tonnes to 16.20m tonnes its forecast for EU soft wheat inventories as of the end of 2021-22, which finishes next month.
That would represent a build of 7.27m tonnes – or more than 80% – year on year, and take inventories to their highest since 2008-09, not including UK supplies, GrainPriceNews analysis of commission data shows.
In 2022-23, inventories will expand further, by 950,000 tonnes to 17.16m tonnes, the commission said, ditching expectations last month of a significant drawdown in inventories.
The revisions reflected reduced expectations for EU soft wheat exports for both seasons, after a deceleration in shipments to a crawl, taking them below year-ago-levels. Soft wheat exports for 2021-22 were pegged at 31.0m tonnes, a downgrade of 1.0m tonnes from last month, with the figure for next season cut by 2.0m tonnes to 38.0m tonnes.
EU soft wheat exports for the four weeks to May 29 averaged less than 290,000 tonnes per week, compared with an average of 436,000 tonnes for the previous four weeks, according to commission data, which are subject to revision.
Shipments in the week to May 22 fell below 200,000 tonnes for the first time since July last year.
The slowdown has been attributed to factors including a stand-off by buyers in the face of high prices, besides a hit to cargos to China in the face of the country’s Covid lockdowns.
However, the commission also noted that spring plantings in Ukraine had “exceeded earlier expectations”, and an upgrade of 6.9m tonnes, to 48.3m tonnes, in APK Inform’s forecast for the country’s total grain harvest this year.
The EU was now expected in 2022-23 to import 13.0m tonnes of corn – an upgrade of 4.0m tonnes from last month’s forecast.
The “adjustment of soft wheat exports and maize imports levels [was made on] on expectations of Ukraine’s 2022-23 harvest and exports”, the commission said.
Ukraine remains the largest origin for EU corn imports, accounting for half of the 15.1m tonnes bought in so far this season.
For 2021-22 too the commission lifted its forecast for EU corn imports, by 2.0m tonnes to 16.0m tonnes.
The revisions come amid repeated political efforts, spurred by the likes of Turkey and the UN, to reach an agreement between Moscow and Kiev which would boost grain exports from Ukraine amid the war in the country.
However, wheat prices soared 4% in Chicago on Monday after Russia renewed attacks on Kiev, a move viewed as curtailing hopes of diplomatic progress.