Global output of soybeans and rice increasingly pointed to an all-time high as well, the IGC said.
But, in the European wheat sector, “the past month has seen escalating concerns about availabilities of milling grades. Ample rains boosted average yields of wheat in many places, but caused some quality downgrading,” the IGC said. Some market participants remained focused on “an expected shortfall in supplies of the best milling grade wheat.”
Tightness in high-quality European wheat supplies indicated greater supplies of feed wheat, experts said.
“The French (soft) wheat crop turned out a lot smaller than expected and, with all the rain they had, the expectation was the quality of the crop was not going to be up to par,” said Paul Meyers, vice-president, commodity analysis, at Foresight Commodity Services, Naperville, Illinois, U.S.
“Because of the poor quality of some of the wheat in France and Germany, more wheat will move into feed channels, because some of that wheat has been downgraded and that is where it has to go,” he said, noting that an influx of feed wheat is likely to reduce demand for corn.
As for milling wheat in Europe, customers seeking high-quality soft wheat likely will be able to find supplies on the continent, although the search might be a little harder than usual and premiums may be “a little above average,” Meyers said.
Buyers “will have to go to other sources, but the other countries in Europe are having pretty good production,” he said, noting that some reports have indicated “better quality wheat from Bulgaria was moving into France in small quantities.”
While acknowledging that a wheat crop in Europe such as the current one was unusual — where excessive rains pushed up yields but depressed proteins — Meyers contended market effects were likely to be relatively minor.
“There will be some dislocation, but I don’t think overall it will be a major factor,” he said, noting an increase in the forecast carryover from last year’s world wheat crop, which included better-quality supplies from the European Union than what may be available this year.
The IGC August forecast of total 2016-17 world wheat production was 743 million tonnes, up 1% from 735 million tonnes as the July forecast and from an estimated 736 million tonnes the previous crop year. The forecast for 2016-17 carryover was increased slightly to 229 million tonnes from 228 million tonnes in July and was up 6% from an estimated 217 million tonnes in 2015-16.
Global corn production was forecast at 1.03 billion tonnes in 2016-17, up 1% from the July forecast of 1.017 billion tonnes and up 6% from the estimate of 969 million tonnes in 2015-16.
World soybean production in 2016-17 was forecast at 325 million tonnes, up 1% from the July forecast of 321 million tonnes and up 3% from 316 million tonnes from 2015-16.The IGCforecast world rice production at 484 million tonnes, down slightly from the July forecast of 487 million tonnes but up 2% from the 2015-16 estimate of 473 million tonnes.