In its fourth forecast for the 2022 crop, grain industry
group COCERAL sees the total grain crop in the EU-27+UK at 287.9 million tons.
This would be down significantly from the 309.8 million tons harvested in
Wheat production (excluding durum) is estimated at 140.5 million tons, down from the 143 million tons in the previous forecast and from last year’s 143.4 million tons. The estimate has particularly deteriorated for Spain and Hungary due to extreme heat and drought. The EU-27+UK 2022 barley production is estimated at 59.8 million tons, slightly down from the 60 million tons seen in May, but up from 59 million tons last year.
The EU-27 2022 corn crop is now seen at only 51.9 million tons, down from the last year’s 70.2 million tons, due to significant downward revisions for a number of countries due to hot and dry weather during pollination, particularly Hungary, Romania, France, Italy, and Germany. In contrast, Poland is expected to see another huge crop of more than 7 million tons, being the third biggest corn producer in the EU after France and Romania. The EU-27+UK rapeseed crop is estimated at 20.7 million tons, the highest level in the last few years.
EU WHEAT EXPORTS EXPAND BUT CONSTRAINED BY STRONG
Since the beginning of 2022/23 (July/June), EU wheat exports have started strong with July-August exports over 6 million tons cumulatively. Supported by ample beginning stocks, exports are expected to rise to the highest in 3 years, despite a smaller crop. The robust monthly shipment pace is expected to wane as competition increases, both domestically and internationally.
The primary use for wheat in the EU is for food, which has been rising as COVID-related restrictions subside and tourism rebounds. In addition, an influx of refugees from Ukraine has boosted consumption demand higher. After food, the next largest volume for wheat is for animal feed use, which remains robust. Over the past decade, corn has overtaken wheat as the predominant feed grain, sourced from domestic production and imports. This year, the EU corn crop has been affected by adverse weather conditions and the crop size is expected to be down 17 percent from the prior year. With less corn production, the EU is expected to import more. However, imports are forecast only marginally higher given tight global corn supplies, resulting in less corn feed use.
Despite the strong early-season pace, monthly shipments of EU wheats are expected to subside as more Black Sea wheat becomes available as the harvest is completed. Ukraine and Russia are the largest direct competitors to the EU, particularly in Africa and the Middle East. Ukraine wheat has begun to move through the grain corridor, with over 500,000 tons shipped in the past month. Meanwhile, Russia is completing its harvest of its record grain crop and still has ample carryin stocks. Russia is forecast to be the largest global exporter and even with record exports will still have abundant ending stocks. As a result, Russia has the most competitive export quotes globally and is likely to see the pace of sales and shipments rise in the months to come. While the EU is set to be the second largest exporter, demand from the domestic market will take precedence over exports as the year progresses.