Highlights

The EU28 grain harvest is now under way in most Member States. While the prospects for both yield and quality look good in most Member States, this cannot be said of France, the EU28's main grain exporter. While the early cuts of the winter grains in the southern EU28 are suggesting good yields, cloudy and wet weather over the last two months in France has damaged the outlook for both the size and quality of its grain crop. The total MY2016/17 EU28 grain crop is subsequently revised down to just under 312 MMT, little changed on MY2015/16 but nearly 16 MMT lower than the record set in MY2014/15, with the possibility of a further reduction post-harvest once the impact on the French crop becomes clearer.

Executive Summary

Favorable growing conditions across much of the EU28 through the spring and into early Summer have been contrasted by very wet and cloudy weather across some of the key growing regions of France since mid-May. As a consequence, an improved outlook for much of the EU28's grain crop has been more than offset by expectations of poor quality and a much reduced harvest in France. The wheat and barley harvests are now under way, albeit two weeks late in France, while the corn crop is generally reported to be developing well, albeit on a reduced area year-on-year. Although the total area planted to grain crops in the EU28 is little changed year-on-year, a reduction in the area planted to corn has been offset by increased plantings of both barley and rye. Similarly, a much improved forecast yield for corn is offset by reduced yield of the other grains such that total production in MY2016/17 is now forecast to be 311.75 MMT, little changed on MY2015/16 but nearly 16 MMT below the record crop experienced in MY2014/15. Within this total, wheat production is forecast at 154.5 MMT and barley and corn both at 62,000 MT, down 5.5 MMT, and up 700,000 MT and 2 MMT, respectively, year-on-year. Of these three crops, the change is most significant for corn given the reduction in planted area. Rye and oats production are both forecast up around 500,000 MT year-onyear in MY2016/17 while mixed grain production is forecast up over 300,000 MT. Only sorghum production is currently forecast unchanged year-on-year. As always, much will depend on the weather over the coming weeks, not just for crop development but also for harvest volume. In addition, the true extent of the damage to the French crop is only likely to become clear at harvest. The total supply of grains in the EU28 in MY2016/17 is forecast at 359.1 MMT, down around 5 MMT largely due to reduced forecast corn imports. Total EU28 grains consumption is currently forecast at nearly 288.3 MMT in MY2016/17. Within this total, Food, Seed & Industrial (FSI) use of grains, which has been following an upward trend but faltered in MY2015/16, is forecast to rise once again in MY2016/17, mainly due to increased year-on-year industrial use of wheat in the biofuels sector in Poland and the UK. Total feed use is also forecast to rise in MY2016/17, albeit below the previous forecast. EU wheat exports in MY2015/16 are now estimated to have reached 33.5 MMT by year end, buoyed by North African demand in the latter part of the season. Following a prompt start to the MY2016/17 campaign, wheat exports are currently forecast to reach 30.5 MMT in MY2016/17, tempered somewhat by a reduction in forecast French exports. Although 3 MMT down year-on-year, if realized this would still be a considerable export volume given that MY2013/14 was the first year the EU28 exported more than 30 MMT of wheat. The net result is a 2 MMT reduction in stocks in MY2016/17. For rice, trade data indicate that a number of Least Developed Countries have responded to the duty free/quota free access to the EU market afforded to them under the EU's “Everything But Arms" arrangement. In particular, EU rice imports from Cambodia, Myanmar and Guyana have increased in MY2014/15, supporting rising domestic consumption of rice in the EU28. Rice imports have started MY2015/16 strongly meaning that full year imports are again forecast to rise on a market year basis. Combined with a year-on-year increase in domestic production, further consumption growth is forecast. With imports currently forecast to stabilize in MY2016/17, the upward trend in EU28 rice consumption is forecast to continue, albeit to a lesser extent than in recent years.

Country specific There is a great deal of uncertainty for the French grain crop outlook - both its size and quality have been negatively impacted by excessively wet and cloudy weather since mid-May in central, northern and eastern France but the extent of the damage is unclear. The poor weather also means the harvest is running about two weeks behind normal. While it is a more positive story in the south west and on the Atlantic and Channel coasts, the affected areas report widespread lodging. The percentage of small grains is also reported to be high which could lead to further losses at harvest (when grains are too small, they may pass through the combine). Additionally, fungal infestation, which could lead to higher mycotoxin levels, is widely reported. The French wheat crop is subsequently revised down 5 MMT on the previous forecast with the possibility of a further reduction post-harvest. The reduced quality, such as low specific weights, problematic falling Hagberg numbers and protein problems, could present export challenges. Durum wheat quality is also thought to have suffered in central France although not in the traditional growing regions in the south east and south west. An increase in the area planted to durum means a sizeable crop is still expected but, as with soft wheat, the quality issues could have an impact on export opportunities. The weather is also reported to have taken a heavy toll on the barley crop and, like wheat, lodging and fungal infestation is widespread. While the forecast for barley production is reduced 750,000 MT, it is likely to remain a sizeable crop due to the large planted area. Again, as with wheat, reduced quality, such as poor specific weight, is expected to reduce export opportunities, most notably Chinese demand for French malting barley. While the French MY2016/17 corn crop forecast is reduced as well, production is still forecast up year-on-year after the poor yield in MY2015/16. Elsewhere in the EU28 the story is much more positive. In the UK, while no one expects a repeat of the large crops experienced in the last two years, prospects remain good, both in terms of size and quality despite recent wet weather. In Germany, while parts of the country have experienced very wet weather, its timing is not thought to have had too detrimental effect on the grain crop and the sentiment remains positive. Further south, in Spain, favorable spring conditions both in terms of precipitation and mild temperatures have boosted winter grain yields. Indeed, if it were not for a reduction in the area planted to corn and a lower yield due to the use of short cycle varieties, Spain would be forecasting a record grain crop. While the quality of the grain crop is generally good, there is some concern for the durum wheat crop due to Hessian fly incidence. In Portugal, favorable weather conditions are expected to result in a good yield for winter crops. However, spring rains and reduced crop margins are thought to have resulted in an historically low area planted to corn. In the Czech Republic, Slovakia and Croatia, it is a story of good weather and a positive outlook for all grain crops. Further east, Romania's wheat crop is reported to be developing extremely well. Despite some heavy rains and summer storms, the crop is forecast to exceed the previous year's level on a slightly increased planted area. Initial tests indicate that wheat quality is expected to be good. The barley crop is also developing very well and the prospects are very positive. Finally, all currently bodes well for the corn crop but with crop entering the critical phase of pollination, the focus remains on the weather. Moisture levels across the country have improved over the spring and summer meaning development conditions are currently much better than in MY2015/16. It is a similarly positive story in Bulgaria where the outlook remains positive for all of the grain crops. With the wheat harvest well under way and the barley harvest all but complete, quality is reported to be very good with some farmers reporting record yields. The corn crop is also reported to be doing very well. Similarly, Hungary's corn crop is still forecast up year-on-year after the poor yield experienced in MY2014/15 and despite a reduction in the planted area. Finally, in Greece, very favorable weather conditions are expected to result in a comparatively high year-on-year yield for the durum wheat crop meaning its wheat crop is revised up 200,000 MT. As in some other Member States, low corn prices and poor margins have discouraged farmers from continuing to increase the planted area which is now forecast unchanged from MY2015/16.

Wheat

2014/2015

2015/2016

2016/2017

Market Begin Year

Jul 2014

Jul 2015

Jul 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

26725

26743

26761

26803

26857

27000

Beginning Stocks

9938

9938

13823

12682

18729

15982

Production

156828

156884

160006

160000

156500

154500

MY Imports

5975

5978

6700

6700

5500

5000

TY Imports

5975

5978

6700

6700

5500

5000

TY Imp. from U.S.

0

717

0

0

0

0

Total Supply

172741

172800

180529

179382

180729

175482

MY Exports

35418

35418

33000

33500

34000

30500

TY Exports

35418

35418

33000

33500

34000

30500

Feed and Residual

54000

55000

59000

60000

59000

59500

FSI Consumption

69500

69700

69800

69900

70300

70400

Total Consumption

123500

124700

128800

129900

129300

129900

Ending Stocks

13823

12682

18729

15982

17429

15082

Total Distribution

172741

172800

180529

179382

180729

175482

Barley

2014\2015

2015\2016

2016\201

Market Begin Year

Jul 2014

May 2015

Jul 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

12419

12401

12156

12164

12388

12300

Beginning Stocks

5621

5621

5877

5977

5526

5407

Production

60615

60615

61349

61450

62762

62000

MY Imports

88

88

300

280

100

100

TY Imports

269

269

100

100

100

100

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

66324

66324

67526

67707

68388

67507

MY Exports

9547

9547

10100

10500

9000

8000

TY Exports

10642

10642

9900

9900

9000

8000

Feed and Residual

35500

35500

36500

36500

38500

38500

FSI Consumption

15400

15300

15400

15300

15400

15250

Total Consumption

50900

50800

51900

51800

53900

53750

Ending Stocks

5877

5977

5526

5407

5488

5757

Total Distribution

66324

66324

67526

67707

68388

67507

Corn

Market Begin Year

European Union

2014/2015

2015/2016

2016/2017

Oct 2014

Oct 2015

Oct 2016

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

9575

9568

9237

9450

8943

9000

Beginning Stocks

6891

6891

9410

9703

6275

6953

Production

75779

75840

57979

59000

63831

62000

MY Imports

8646

8647

13200

13000

11000

11000

TY Imports

8646

8647

13200

13000

11000

11000

TY Imp. from U.S.

286

286

0

0

0

0

Total Supply

91316

91378

80589

81703

81106

79953

MY Exports

4026

4025

1600

2000

2500

3000

TY Exports

4026

4025

1600

2000

2500

3000

Feed and Residual

59500

59500

54700

55000

55500

53500

FSI Consumption

18380

18150

18014

17750

17800

18000

Total Consumption

77880

77650

72714

72750

73300

71500

Ending Stocks

9410

9703

6275

6953

5306

5453

Total Distribution

91316

91378

80589

81703

81106

79953

(1000 HA) ,(1000 MT)

Oats

Market Begin Year

European Union

2014\2015

2015\2016

2016\2017

Jul 2014

Jul 2015

Jul 2016

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2511

2511

2527

2478

2577

2480

Beginning Stocks

894

894

858

779

582

604

Production

7854

7833

7524

7500

8175

8000

MY Imports

4

4

5

5

5

5

TY Imports

4

4

5

5

5

5

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

8752

8731

8387

8284

8762

8609

MY Exports

219

219

230

230

200

200

TY Exports

231

231

230

230

200

200

Feed and Residual

6000

6050

5900

5750

6100

6100

FSI Consumption

1675

1683

1675

1700

1700

1700

Total Consumption

7675

7733

7575

7450

7800

7800

Ending Stocks

858

779

582

604

762

609

Total Distribution

8752

8731

8387

8284

8762

8609

Rice, Milled. Market Begin Year

Sep 2014

Sep 2015

Sep 2016

European Union

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

427

424

431

434

430

437

Beginning Stocks

1163

1163

1237

1217

1232

1327

Milled Production

1963

1961

2055

2050

2026

2058

Rough Production

2863

2860

2972

2996

2919

3004

Milling Rate (.9999)

6856

6856

6914

6842

6940

6851

MY Imports

1703

1716

1600

1750

1600

1750

TY Imports

1786

1786

1600

1750

1600

1750

TY Imp. from U.S.

53

46

0

0

0

0

Total Supply

4829

4840

4892

5017

4858

5135

MY Exports

272

273

280

240

260

280

TY Exports

251

250

270

270

260

280

Consumption and Residual

3320

3350

3380

3450

3420

3500

Sorghum

Market Begin Year

Jul 2014

May 2015

Jul 2014

Area Harvested

147

149

139

142

136

131

Beginning Stocks

18

18

23

25

17

10

Production

883

894

769

750

775

750

MY Imports

134

134

120

130

150

130

TY Imports

131

131

120

130

150

130

TY Imp. from U.S.

2

2

0

0

0

0

Total Supply

1035

1046

912

905

942

890

MY Exports

17

17

5

2

5

2

TY Exports

1

1

2

2

5

2

Feed and Residual

975

980

870

870

900

850

FSI Consumption

20

24

20

23

20

22

Total Consumption

995

1004

890

893

920

872

Ending Stocks

23

25

17

10

17

16

Total Distribution

1035

1046

912

905

942

890