Consultancy Strategie Grains sharply cut its demand forecast for European Union wheat in 2021/22 as high prices were seen eroding exports and leading industrial processors to switch to maize.
In a monthly grain report, the consultancy lowered its outlook for EU exports of common wheat, or soft wheat, by 1.6 million tonnes to 30.4 million tonnes.
Along with a cut to projected wheat use in livestock feed in favor of maize (corn) within the EU, this led Strategie Grains to increase its forecast for EU soft wheat stocks at the end of the season by more than 2 million tonnes to just over 12 million tonnes.
“The situation is on the point of tipping into heaviness, especially in France, and prices now have a decrease potential going forward,” it said of wheat.
European wheat prices hit a new 14-year high on Thursday as strong international demand fuelled concern about availability in exporting countries. [GRA/EU]
However, Strategie Grains said the wheat market lacked factors to warrant further price gains unless current wet weather in Australia caused significant harvest damage or Argentina limited exports.
French prices faced further pressure from a change to Algeria’s import terms that favors Russia, it added.
The competitiveness of maize against wheat and also barley led Strategie Grains to revise up by 1.5 million tonnes its forecast for maize use in EU livestock feed.
Maize is also expected to be used heavily in ethanol, it said.
The increased demand prompted the consultancy to raise its outlook for EU maize imports in 2021/22 by 1.1 million tonnes to 15 million tonnes, despite an expected seven-year high for domestic EU maize production at 67.8 million tonnes.
For next year’s EU harvests, an increased rapeseed area and a search for less fertiliser-intensive crops were expected to curb wheat and maize sowing, Strategie Grains said.
It projected the soft wheat area would fall marginally to 21.64 million hectares from 21.69 million this year and maize by 2% to 9.06 million hectares.
The EU barley area was projected up 1% at 10.43 million hectares, supported by expected interest in spring barley due to rising malting premiums and the crop’s lower fertiliser consumption.
