The European Union marked the start of the bloc’s 2022-23 grain marketing year by ditching expectations of rebuild in soft wheat stocks, as dry weather dashed hopes of a larger harvest.
The European Commission slashed by nearly 4.0m tonnes to 13.18m tonnes its forecast for the bloc’s soft wheat inventories at the close, next June, of the 2022-23 season as started on Friday.
The downgrade reflected a 5.34m-tonne cut to the forecast for the bloc’s newly-started soft wheat harvest which, at 125.0m tonnes, was also now seen declining year on year rather than showing a marginal increase, as expected last month.
The commission cited a reduced expectation for this year’s yield which, at 5.73 tonnes per hectare, was forecast falling more than 0.25 tonnes per hectare short of the 2021 result.
The revision follows a caution last week from the commission’s Mars agrimeteorology bureau over crop damage from “continued drier-than-usual conditions” in many European countries, including France, the EU’s biggest wheat producer, where May temperatures broke records.
Early results of the French harvest “confirm heterogeneity in the yields”, Agritel said separately on Friday, noting too the onset of rains which have come largely too late to repair yield damage, but have slowed the reaping of the crop.
However, the commission made a particularly large downgrade, of 2.3m tonnes to 26.0m tonnes, to its expectations for overall grains production in Romania, where Mars warned of crop damage from a “persistent rain deficit”.
Despite the weakened harvest forecast, the commission stood by a forecast for EU soft wheat exports this season hitting a record 38.0m tonnes in 2022-23.
That would represent a marked increase on the 2021-22 performance, pegged at 30.0m tonnes, a downgrade of 1.0m tonnes from last month’s estimate.
Hopes for EU wheat exports this season have been buoyed by Egypt’s 815,000-tonne wheat purchase on Wednesday, which included 350,000 tonnes ordered from France.
Typically, Egypt’s Gasc grain authority turns to Black Sea countries, and notably Russia, early in the marketing year. However, the competitiveness of Russian supplies is being tested by a rouble which touched seven-year highs against the dollar this week.
However the make-up of Gasc’s historically-large order “illustrates the competitiveness of French origin on the international scene, and the tensions that exist linked to the situation in the Black Sea basin” amid the Ukraine war, Agritel said.