Report Highlights:

With some Member States starting to publish provisional harvest estimates for 2015, the total MY2015/16 EU-28 grain crop is revised up to 306.8 MMT, 2.2 MMT above previous expectations. Both the wheat and barley harvests are now estimated up on previous forecasts, by over 1.7 MMT and nearly 0.7 MMT, respectively. Interestingly, both are of a similar size to MY2014/15. In contrast, the corn harvest forecast is lowered 500,000 MT to just 57.5 MMT, the smallest crop since MY2007/08, and a reflection of the challenging growing conditions faced by much of the crop through the summer months. The plentiful supplies of domestic wheat and barley in MY2015/16 but much reduced supply of corn means the focus is now turning to usage within the EU-28 and the likely implications for trade.

HA = Hectares

MT = Metric Tonne

MY = Marketing Year. Post and USDA official data both follow the EU-28 local marketing year of July to June except for corn which follows an October to September calendar

TY = July to June for wheat and October to September for coarse grains

Executive Summary

With some Member States starting to publish provisional harvest estimates for 2015, the total MY2015/16 EU-28 grain crop is revised up to 306.8 MMT. This is 2.2 MMT more than previously forecast but 20.5 MMT down on last year's record crop. The fall is almost entirely due to a much reduced corn harvest, now forecast to reach 57.5 MMT, over 18 MMT lower than in MY2014/15. While the area planted to corn is down 400,000 Ha, the large decline in production is mainly due to much reduced yields in the main corn growing countries as a consequence of challenging growing conditions during the key periods for crop developments. The EU-28 rye and mixed grain crops are also down year-on-year, by 1.4 MMT and 950,000 MT respectively, again in large part due to reduced yields. In contrast, both the wheat and barley harvests are now estimated to be up on previous forecasts, by over 1.7 MMT and nearly 0.7 MMT, respectively, while the oat harvest is up 400,000 MT. Interestingly, all three of these crops are of a similar size to MY2014/15. The EU-28 is estimated to have carried 31.9 MMT of grain stocks into the current marketing year, up over 6.5 MMT on a year earlier, and partially offsetting the reduced harvest. The plentiful supplies of domestic wheat and barley in MY2015/16 but much reduced supply of corn means the focus is now turning to usage within the EU-28 and the likely implications for trade.

Crop specific

EU-28 wheat production is now forecast to be a record for the second consecutive year. Strong production has been reported across much of the EU-28 despite some weather related concerns earlier in the season. Examples include the Czech Republic, Lithuania, Romania and Hungary. Indeed, the early season wet conditions in Hungary, which were then repeated in May, have seen winter wheat yields in that country hit a 25 year high. In Germany, dry conditions in June and July negatively affected the yield although the crop is still expected to be 2 MMT above the five-year average and, at 26.5 MMT, only 1.2 MMT short of last year's record. The EU-28 wheat production number has been further bolstered by a record sized crop in France which is currently forecast to reach 42.8 MMT, nearly 4 MMT larger than both the MY2014/15 crop and the previous record 39 MMT achieved in MY2008/9. A second successive UK wheat crop of over 16 MMT, despite a reduced planted area, has also added support. The quality of the soft wheat crop in France, the EU-28's largest wheat exporter, is described as good and moisture content is low due to the very dry conditions at harvest. Its durum wheat crop is also described as being of good quality, both in yield and protein content, a sharp improvement on MY2014/15. Elsewhere, quality is also reported to be good, notably in the UK, in Hungary and in Germany, the latter benefitting from dry weather at harvest. While year-on-year imports are forecast little changed, an increase in Spanish third country imports is offset by a forecast decline in those by Italy.

On the wheat demand side, with Food, Seed & Industrial (FSI) use relatively stable, the focus is on exports and feed use. The improved availability of feed wheat within the EU-28 will see consumption rise year-on-year, particularly in France and Germany. On third country export markets, the current pace of EU-28 wheat export licenses is significantly behind MY2014/15 despite Egypt's recent purchase of 240,000 MT of French, Polish and Romanian wheat. Until this purchase, recent Egyptian tenders had seen France, which has a large exportable surplus of milling quality wheat this year, facing early season competition from Black Sea Origin wheat. Despite the slower start to the export campaign this season, the ample supplies mean wheat exports are currently forecast to reach 33 MMT, 1 MMT above MY2013/14 and only 2.2 MMT short of last season's record export figure. Even with the forecast 3 MMT year-on-year increase in feed use in MY2015/16, ending stocks are also currently forecast to rise again.

For barley, like wheat, the summer saw the fortunes for the crop improve across much of the EU-28. A number of countries exceeded previous forecasts including France, Germany, Hungary, the Czech Republic and the UK. Subsequently, production is now forecast unchanged year-on-year. In the three largest exporters - France, Germany and Romania - quality is reported to be good and, unlike wheat, third country exports have got off to a very strong start. In particular, China is now a major importer of French barley. Total EU-28 export licenses are currently running around 1 MMT ahead of this time last year and full year exports are forecast to reach 9 MMT. On the demand side, EU-based traders, led by Iberian Peninsula importers, made extensive use of the zero duty barley from Ukraine. To date, nearly 80 percent of the Ukraine barley zero levy quota for 2015 has been allocated. This is expected to partially substitute corn in the feed mix and contribute to the forecast marginal year-on-year increase in total feed consumption of barley.

Of most impact on the total EU-28 grain production number in MY2015/16 is the forecast 18.2 MMT year-on-year decline in corn production, albeit from the record 75.7 MMT set in MY2014/15. The single largest decline is expected to be in France where plants suffered from a heatwave in late June and early July which reduced the yield, compounding the impact of the already reduced planted area, and meaning production is now forecast at just 13 MMT, over 5 MMT lower than the domestic record set in MY2014/15. While the decline is expected to be most significant in France, Hungary's crop is forecast down over 3 MMT year-on-year, Romania by over 2 MMT, Poland by 1.4 MMT and both Germany and Italy by over 1 MMT, all due in large part to the very hot, dry summer. Additionally, nearly every other corn producing EU Member State is forecast to see reduced corn output as compared to MY2014/15. While extra-EU imports are still forecast up year-on-year, the forecast for MY2015/16 is reduced to 14 MMT with the final number ultimately being determined by the price differential between corn and other feeds as well as availability both domestically and on third country markets. As such, total supply is reduced by nearly 1.4 MMT as compared to the previous forecast. While industrial use of corn is forecast to decline marginally in MY2015/16, more significant declines in both feed use of corn and ending stocks are currently forecast.

Of final note are the rye and mixed grain harvests. Reduced rye plantings in Poland and mixed grain plantings in both Germany and Poland contributed, along with the weather, to reduced crops in MY2015/16, down year-on-year by 1.4 MMT and almost 1 MMT respectively, albeit in line with previous forecasts. In both instances, the reduced supplies are expected to lead to reduced feed use of these grains as compared to MY2014/15.

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

25883

25875

26806

26900

26666

26650

Beginning Stocks

10711

10711

9867

9902

13067

13775

Production

144415

144550

156523

156800

155263

157000

MY Imports

3974

3974

5973

5974

6000

6000

TY Imports

3974

3974

5973

5974

6000

6000

TY Imp. from U.S.

657

717

0

664

0

0

Total Supply

159100

159235

172363

172676

174330

176775

MY Exports

32033

32033

35396

35401

33000

33000

TY Exports

32033

32033

35396

35401

33000

33000

Feed and Residual

49000

49000

54500

54500

57000

57500

FSI Consumption

68200

68300

69400

69000

68850

68750

Total Consumption

117200

117300

123900

123500

125850

126250

Ending Stocks

9867

9902

13067

13775

15480

17525

Total Distribution

159100

159235

172363

172676

174330

176775

(1000 HA) ,(1000 MT)

Barley

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

12406

12382

12432

12400

12302

12400

Beginning Stocks

5071

5071

5696

5574

5607

5615

Production

59722

59600

60470

60500

59806

60500

MY Imports

44

44

88

88

200

100

TY Imports

58

58

225

225

100

100

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

64837

64715

66254

66162

65613

66215

MY Exports

5741

5741

9547

9547

7500

9000

TY Exports

4926

4926

10500

10500

7000

8000

Feed and Residual

38000

38000

35500

35500

37000

36000

FSI Consumption

15400

15400

15600

15500

15700

15600

Total Consumption

53400

53400

51100

51000

52700

51600

Ending Stocks

5696

5574

5607

5615

5413

5615

Total Distribution

64837

64715

66254

66162

65613

66215

(1000 HA) ,(1000 MT)

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

9664

9665

9530

9550

9186

9150

Beginning Stocks

5147

5147

6795

6800

8625

9750

Production

64630

64635

75730

75800

57996

57500

MY Imports

15919

15919

8600

9000

16000

14000

TY Imports

15919

15919

8600

9000

16000

14000

TY Imp. from U.S.

1337

1337

0

0

0

0

Total Supply

85696

85701

91125

91600

82621

81250

MY Exports

2401

2401

4000

4000

1000

2000

TY Exports

2401

2401

4000

4000

1000

2000

Feed and Residual

58000

58000

59500

59500

57500

55000

FSI Consumption

18500

18500

19000

18350

19000

18000

Total Consumption

76500

76500

78500

77850

76500

73000

Ending Stocks

6795

6800

8625

9750

5121

6250

Total Distribution

85696

85701

91125

91600

82621

81250

(1000 HA) ,(1000 MT)

Rye

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2577

2550

2114

2100

1913

1900

Beginning Stocks

795

795

1210

1003

1082

951

Production

10157

10100

8854

8780

7483

7350

MY Imports

77

77

102

102

50

50

TY Imports

96

96

90

90

50

50

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

11029

10972

10166

9885

8615

8351

MY Exports

169

169

184

184

150

150

TY Exports

201

201

175

175

150

150

Feed and Residual

4900

5100

4500

4450

3400

3400

FSI Consumption

4750

4700

4400

4300

4400

4315

Total Consumption

9650

9800

8900

8750

7800

7715

Ending Stocks

1210

1003

1082

951

665

486

Total Distribution

11029

10972

10166

9885

8615

8351

(1000 HA) ,(1000 MT)

Oats

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2652

2590

2543

2500

2595

2550

Beginning Stocks

901

901

906

864

864

724

Production

8392

8300

7848

7750

7443

7850

MY Imports

4

4

4

4

5

5

TY Imports

3

3

5

5

5

5

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

9297

9205

8758

8618

8312

8579

MY Exports

316

316

219

219

150

150

TY Exports

291

291

225

225

150

160

Feed and Residual

6400

6350

6000

6000

5800

6000

FSI Consumption

1675

1675

1675

1675

1675

1675

Total Consumption

8075

8025

7675

7675

7475

7675

Ending Stocks

906

864

864

724

687

754

Total Distribution

9297

9205

8758

8618

8312

8579

(1000 HA) ,(1000 MT)

Sorghum

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

135

135

146

145

144

145

Beginning Stocks

5

5

19

13

19

31

Production

703

700

878

875

747

750

MY Imports

193

193

134

134

100

150

TY Imports

186

186

130

130

100

150

TY Imp. from U.S.

25

25

0

0

0

0

Total Supply

901

898

1031

1022

866

931

MY Exports

2

3

17

17

5

2

TY Exports

18

18

5

5

5

2

Feed and Residual

860

860

975

950

825

885

FSI Consumption

20

22

20

24

20

24

Total Consumption

880

882

995

974

845

909

Ending Stocks

19

13

19

31

16

20

Total Distribution

901

898

1031

1022

866

931

(1000 HA) ,(1000 MT)

Mixed Grain

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

3953

3925

4035

4000

4132

4100

Beginning Stocks

1164

1164

936

914

1044

964

Production

15372

15300

16808

16800

15869

15850

MY Imports

0

0

0

0

0

0

TY Imports

0

0

0

0

0

0

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

16536

16464

17744

17714

16913

16814

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

14200

14100

15000

15000

14300

14500

FSI Consumption

1400

1450

1700

1750

1700

1650

Total Consumption

15600

15550

16700

16750

16000

16150

Ending Stocks

936

914

1044

964

913

664

Total Distribution

16536

16464

17744

17714

16913

16814

(1000 HA) ,(1000 MT)