Europe’s inventories of unsold soft wheat are predicted to reach an eight-year high at the end of June 2017 as exports of the grain slide for a second season, according to the European Union.
Carryover stockpiles of soft wheat, used for making bread flour and in livestock feed, are forecast to rise 1.5 percent in 2016-17 to 17.43 million metric tons, according to a European Commission estimate posted on its website on Tuesday. That will add to a 57 percent increase in stocks this season as a record EU harvest coincided with falling export sales.
Bumper crops of wheat and barley in the EU are worsening a global glut, with the International Grains Council predicting global stocks of grains at a 29-year high. Milling-wheat futures traded in Paris have dropped 19 percent in the past 12 months as grain from the continent faces increased international competition.
“From a European perspective, we are just in a corner where we’ve got too much wheat,” said Benjamin Bodart, director at U.K.-based farm adviser CRM Agri-Commodities. “Europe has not really gained any market share in the export market. We are still facing tough competition.”
EU exports of soft wheat are predicted to fall to 27 million tons in 2016-17, down from 29.11 million tons in the season ending in June and 33.34 million tons in the previous one.
Farmers in the 28-nation bloc are forecast to gather usable production of 142.45 million tons of soft wheat this year, down from 150.77 million tons in 2015. That would still be the third-biggest harvest in 10 years.
“Crops have really experienced very little damage over winter except in Poland and a bit in Germany where crops have been impacted by January frosts,” Bodart said. “We could see quite a bumper crop in Europe.”
The EU’s barley harvest may climb 0.4 percent to 60.98 million tons next season, the data show. With exports in the 2016-17 season predicted to slump 16 percent to 9.19 million tons, unsold supplies of barley may jump 29 percent to 9.43 million tons by the end of June next year, the highest since the 2010-11 season.