EU: EU Commission cuts forecast for barley, wheat, and rapeseed production

The EU Commission has cut its forecast of 2018 soft wheat production in the bloc by 2.6 mln tonnes from its projection at the end of May (to 137.6 mln tonnes). Similarly, the forecast for barley output was down 2.6 mln tonnes (to 58.4 mln tonnes), with oilseed rape production reduced by 0.8 mln tonnes (to 20.8 mln tonnes). These reductions reflect the lower yield projections released in last week’s MARS report following adverse weather in a number of countries

While the reductions would have been expected following the MARS report, it also feeds into tighter EU grain supply and demand forecasts. In particular, the Commission now expects soft wheat stocks to fall by 4.6 mln tonnes over the course of 2018/19, instead of by 2.0 mln tonnes. Barley stocks are forecast to decline by 1.5 mln tonnes when a 1.1 mln tonnes increase was expected in May. If confirmed, this could add some support to European prices.