The EU could export more wheat than the drought-hit USA in 2014/15.
The US Department of Agriculture issued its first set of world supply and demand estimates for new crop late on Friday (9 May), which estimate total world wheat exports of almost 152m tonnes.
Of this, the EU is expected to account for 27.5m tonnes, while the USA is likely to ship less than 26m tonnes. The other main exporters will be Canada (21m tonnes), Russia (19m tonnes) and Australia (18.5m tonnes).
Despite the likely impact of the US drought, wheat futures fell as a result of the WASDE release, as it put world end-of-season stocks of wheat for both 2013/14 and 2014/15 higher than average trade estimates, at 186.53m tonnes and 187.42m tonnes respectively.
Although US wheat production is set to fall 8% to 53.4m tonnes, world corn global corn production for 2014/15 is forecast at a record 979.1m tonnes, very close to that of 2013/14. This is expected to lead to a 15-year high in end-of-season stocks.
“The initial projections for 2014/15 from the USDA indicate a second consecutive surplus for maize, with further rebuilding of stock levels possible. but a finely balanced situation for the global wheat market,” said HGCA. Record soya bean production is also forecast.
While corn output in Brazil, India, South Africa and Ukraine will fall, this will be offset by increased harvest sizes in Argentina, China, Mexico and Russia.
Although large parts of the main US wheat and corn acreage are in drought, better conditions in the Midwest also put pressure on corn futures prices, as planting progress is expected to improve in the next week.
July 2014 London feed wheat futures had fallen by £4/t at 3.30pm today (12 May) to £157/t, while November 2014 lost £3.15 to £153/t. Go to fwi.co.uk for the latest futures prices.