World wheat output expectations for 2015/16 were slashed by 4Mt compared with last month, with recent weather concerns manifested through lower production prospects.
The drop in wheat expectations by the International Grains Council (IGC) in their latest report was driven by cuts made to forecasts for the EU, India and Australia
In spite of the diminished prospects, it should be noted that the grain markets are still expected to remain ‘comfortable’, with supply buoyed by the high carry-over from 2014/15.
Additionally, total grain output predictions are partly offset by the IGC’s increased forecasts for maize (with global output up 2Mt to 963Mt).
Although the wheat output outlook for the EU was down on reduced yield potential in Spain, parts of France, Germany and Poland; the UK wheat production forecast was increased.
Approximately 100Kt was added to the UK forecasts, taking production to an estimated 15.1Mt in 2015/16. The UK wheat crop looks to be in generally good condition going into July according to ADAS’ latest Crop Development report, however, symptoms of low moisture in some areas are a watch point for the meantime.
Steep increases for US futures over recent days have taken projected maize prices up to $154.43/t, the highest since the end of April.
New crop futures have firmed following continued wet weather in the US Midwest.
In the EU, support has filtered through to Nov-15 Paris maize futures, which have increased by 4% week-on-week to a nine-week high (€169.25/t).
So although the outlook for maize markets by the IGC – as of last week - was that of bearishness, current threats of weather impacts have continued to drive the markets up.