French analysts cut EU corn production estimates by 10%

Strategie Grains, a French analyst, cut its forecast for EU corn production this year by 730000 tons to 56.21 million tons in its monthly forecast on Thursday, due to downward revisions from France, Hungary and Romania.

According to Strategic Grain, crop yields are expected to fall by 10 per cent in 2009 / 10 compared with 2008 / 09, as wet weather delayed harvests in Greece and Bulgaria.

The analyst slightly raised the EU soft wheat production forecast to 129.05 million tons, an increase of 100000 tons from last month's forecast, as production increases in Romania, the Netherlands, Austria and Poland made up for production cuts in France and Lithuania.

Barley production was almost the same as last month's forecast, at 61.61 million tonnes, but down 6 per cent from 65.43 million tonnes in the same period last year, according to Strategic Grain.

The analyst said the decline in demand for corn was mainly due to reduced industrial use in the Netherlands and weak demand for animal feed. EU corn exports to third parties increased by 100000 tons.

Strategic Grain also said that supply and demand estimates changed the same, so corn stocks at the end of the year to Sept. 30 are expected to fall by only 100000 tons to 4.2 million tons.

The agency raised its forecast for EU wheat exports by 900000 tonnes to 17.1 million tonnes, as EU wheat is more competitive than US wheat, exports to the Middle East increase, and exports to Egypt are forecast to rise.

But demand in the EU fell, mainly because demand for wheat for animal feed is expected to fall by 2 million tons.

Strategic Grain said, "despite an increase in export estimates and a decline in import estimates, the EU has a serious imbalance this month due to a sharp drop in domestic demand."

The analyst said that "the EU currently has more than 6 million tons of wheat surplus", mainly in central Europe, such as Germany, France and the United Kingdom.

Strategic grains also said that the supply and demand of barley in the European Union was out of balance, with an estimated surplus of 8.3 million tons, down from 8.6 million tons in September, due to increased demand in the animal feed sector and little change in EU supply.