Peter Duggan, Strategic Information Services, Bord Bia
Following on from the developments highlighted in a previous FoodAlert article, it’s appears that the European cereal market is showing signs of stabilising. However, North American trade continues to be driven by uncertainty surrounding the quality of the Canadian crop.
European cereal prices have eased from their peaks in mid August. French feed barley has eased from €194/ tonne to €183/tonne. Likewise, German feed barley and feed wheat have tailed off over recent weeks. On the other side of the Atlantic, prices for Canadian barley, US soya beans and US maize reached yearly highs in the latest week ending the 10th September.
The latest USDA monthly forecast downgraded global wheat output projections for the current season by almost 3 million tonnes to 643 million tonnes. This is on the back of further easing in Russian output and lower than expected yields in the EU-27 region. Some upgrade in forecasts for Canadian output is expected, although it is still expected to be 15% lower than last year.
If recent upward adjustments in Australian output by Abare are factored into future prospects, an increase of 3 million tonnes on June’s estimate to 25 million tonnes is anticipated in the coming harvest. As one of the leading global wheat exporters, this could relieve some of the pressure on International supplies.
Looking ahead to next year’s marketing season, concerns are gathering over the lack of adequate moisture levels in much of Russia planned wheat seeding area. FC Stone suggest that only 30% of the area have received sufficient rain to date. Despite closing stocks being revised upwards recently, they are estimated 9% lower at 178 million tonnes for the current season. However, even if lower yields in the Black sea region were to transpire next season, stocks could be utilised from the second largest wheat closing stock recorded this year over the past five years.