Required Report - public distribution

**Date:** 5/3/2005

**GAIN Report Number:** E35094

E35094

**EU-25**

**Grain and Feed**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Norval Francis

U.S. Mission to the EU

**Prepared by:**

Peter Talks

**Report Highlights:**

Provisional estimates for MY 05/06 of EU-25 grain production are 261.6
MMT, a decline of 24.4 MMT since MY 04/05, reflecting more typical
yields after last years banner harvest, a 2.5% area decline following
the return in set-aside obligations from 5% to 10%, as well as drought
conditions in Spain and Portugal.

However, with MY 04/05 ending with significantly increased stocks,
despite the re-introduction of wheat export subsidies, grain will still
be plentiful in the EU in MY 05/06. Problems of excess grains in central
Europe, particularly intervention stocks, will persist, the Commission
may need to address EU grain policy to resolving this issue to ensure
that some of this grain is shifted to either elsewhere in the EU or to
third markets.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Brussels USEU \[BE2\]

\[E3\]

Table of Contents

[**Introduction 2**](#introduction)

[Executive Summary 3](#executive-summary)

[Wheat 4](#wheat)

[Barley 9](#barley)

[Corn 11](#corn)

[Rye 14](#rye)

[Sorghum 16](#sorghum)

[Oats 17](#oats)

[Mixed Grain 18](#mixed-grain)

[Rice 19](#rice)

[Feed Use 21](#feed-use)

[Feed Developments in Hungary, Poland and the Czech Republic:
21](#feed-developments-in-hungary-poland-and-the-czech-republic)

[Intervention 23](#intervention)

[Related Reports 24](#related-reports)

# Introduction

This report presents the grains outlook for Marketing Year (MY) 2005/06
for the European Union. On May 1, 2004, ten New Member States (NMS)
joined the EU, namely, the Czech Republic, Cyprus, Estonia, Hungary,
Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.

Please note that all data provided in this report is based on the
opinion of FAS analysts based in the EU and is not official FAS data.

This is a consolidated EU-25 report prepared with the invaluable input
from the following FAS

analysts:

Bob Flach from FAS The Hague

Xavier Audran from FAS Paris

Steve Knight from FAS London

Sandro Perini from FAS Rome

Dietmar Achilles from FAS Bonn

Wlodek Makowski from FAS Warsaw

Ferenc Nemes from FAS Budapest

Petra Choteborska from FAS Prague

Note: Data in this report is not official USDA data.

HA = Hectares

MT = Metric ton

Benelux = Belgium, the Netherlands and Luxembourg

MY = Marketing Year. The EU local marketing years used in this report
are July/June, except for Corn which follows October/September and Rice
which follows September/August.

Supply Demand balances are provided broken down to the EU-15 and New
Member States-10 (NMS) for most commodities. Note that exports and
imports for the EU-15 and NMS-10 are trade outside of that region, which
includes the other block. When the data is aggregated to the EU-25
level, only trade with the rest of the world (extra-EU) is counted.

For example in MY 2003/04, EU-15 wheat imports totalled 6.303 MMT
(imports from NMS-10 and extra EU-25). NMS-10 wheat imports (imports
from EU-15 and extra EU-25) were 0.406 MMT. EU-25 wheat imports (imports
from outside of the EU-25 only) were 6.146 MMT. EU-15 imports from the
NMS-10 were 0.313 MMT while NMS-10 imports from the EU-15 were 0.250
MMT.

# Executive Summary

Provisional estimates for EU-25 grain production in the 2005/06
marketing year are 261.6 MMT, a drop of 24.4 MMT from MY 04/05's 286.6
MMT. The 05/06 output reflects more typical yields in much of Europe
after the excellent crops recorded in 04/05, as well as drought
conditions in the Iberian Peninsula which threaten to reduce grain
production there by more than a quarter.

Across the whole of the EU-25 output falls are recorded for all the main
grains -- wheat, down 8.1 MMT to 128.4 MMT compared to MY 04/05; Barley,
down 6.7 MMT to 55.0 MMT; Corn, down 5.8 MMT to 47.2 MMT; Rye down 1.5
MMT to 8.4 MMT, as well as mixed grain down 2.0 MMT to 14.3 MMT.

As well as excellent weather conditions in much of Europe for the 04/05
harvest, the set-aside rate had also been reduced for one year from 10%
to 5% following the drought reduced harvest in MY 03/04 of just 229.9
MMT. From MY 03/04 to MY 04/05, EU-25 area planted to grains increased
by 2.5% to 52.3 million hectares and then from MY 04/05 to MY 05/06,
area is estimated to decline by 2.5% to 51.0 m ha.

MY 04/05 production exceeded demand, with export performance
unexceptional despite the re-introduction of export subsidies for EU
wheat after a two year break. The result has been significant quantities
of grain offered into official EU intervention as well as increased
private stocks. For the MY 04/05 so far through to early May, 13.7 MMT
of grain had already been offered into intervention, of which 8.5 MMT
was wheat, 3.0 MMT corn and 2.1 MMT barley. The 04/05 campaign has been
notable for the significant surplus of grain produced in central Europe,
in particular in Hungary. Lacking cheap access to seaports, intervention
has been heavily used, already in MY 04/05, over 4 MMT of grain has been
offered into Hungarian intervention. However, as this is more than the
Hungarian authorities can realistically cope with, so far just 2.0 MMT
of this amount has been formally accepted into intervention, with the
European Commission granting Hungarian authorities a time extension to
assess the outstanding volume of 2 MMT.

With stores full in central Europe some form of Commission policy will
be required to alleviate this situation, preferably before the 2005 new
crop is harvested, beyond the export tenders from intervention already
granted. Options include more aggressive export subsidies, internal
market transport subsidies to ship the grain to, for example, Iberia
where there is a shortage of feed grains, or alterations to intervention
rules which could reduce the quantity of crop eligible to be offered to
intervention. No short term respite to the intervention issue is seen
given continuing incentives for farmers to produce grain, lack of cheap
transport infrastructure to seaports, limited ability to increase
central European feed grain usage.

The large build up of stocks will weigh on the MY 05/06 grain market
despite considerably increased import requirements for the Iberian
Peninsula -- feed import requirements are likely to rise there from 10
MMT in 04/05 to nearly 17 MMT in 05/06. The estimates presented in this
report are based on these additional needs being met mainly from EU
sources, including exports of corn, feed wheat and some barley from
central Europe. The EU's 05/06 overall imports are expected to be
comparable to previous years, based on traditional imports of high
quality wheat from North America, feed quality wheat and barley under
tariff rate quotas (TRQ) from the Black Sea region as well as the
abatement quota corn imports into Spain and Portugal.

# Wheat

**PSD Table EU-25, Wheat**

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ###   |       |       |       | (1000 |       |
|                     | ####  |       |       |       | HA)   |       |
|                     | Wheat |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 003** |       | 004** |       | 005** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 21882 | 2     | 23167 | 2     | 0     | 2     |
|                     |       | 2,044 |       | 3,238 |       | 2,679 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 16831 | 1     | 9497  | 1     | 0     | 2     |
|                     |       | 6,553 |       | 0,936 |       | 6,741 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 1     | 10    | 1     | 13    | 0     | 12    |
|                     | 06615 | 6,788 | 36525 | 6,567 |       | 8,425 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 5912  | 6,146 | 5500  | 5,999 | 0     | 6,007 |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Imports     | 5912  | 6,146 | 5500  | 5,999 | 0     | 6,007 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Import U.S. | 1597  | 2,022 | 0     | 1,753 | 0     | 1,808 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 1     | 12    | 1     | 15    | 0     | 16    |
|                     | 29358 | 9,487 | 51522 | 3,502 |       | 1,173 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 10931 | 1     | 13500 | 1     | 0     | 1     |
| Exports             |       | 1,117 |       | 3,593 |       | 6,895 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jul-Jun Exports     | 10931 | 1     | 13500 | 1     | 0     | 1     |
|                     |       | 1,117 |       | 3,593 |       | 6,895 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 52750 | 4     | 60000 | 5     | 0     | 5     |
| Consumption         |       | 9,038 |       | 3,181 |       | 7,082 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 1     | 10    | 1     | 11    | 0     | 11    |
| Consumption         | 08930 | 7,434 | 16750 | 3,168 |       | 8,306 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 9497  | 1     | 21272 | 2     | 0     | 2     |
|                     |       | 0,936 |       | 6,741 |       | 5,972 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 1     | 12    | 1     | 15    | 0     | 16    |
|                     | 29358 | 9,487 | 51522 | 3,502 |       | 1,173 |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

**Wheat --NMS-10, EU-15 and EU-25**

  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------
  1000's MT        **2003/2004**                           **2004/2005**                           **2005/2006**               

                   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**

  Area             4961            17083       22044       5333            17905       23238       5286            17393       22679

  Beginning Stocks 3149            13404       16553       1566            9370        10936       6500            20241       26741

  Production       16284           90504       106788      24772           111795      136567      20969           107456      128425

  MY Imports       406             6303        6146        363             6845        5999        275             7362        6007

  Jul-Jun Import   1               2021        2022        1               1752        1753        1               1807        1808
  U.S.                                                                                                                         

  **Total Supply** 19839           110211      129487      26701           128010      153502      27744           135059      161173

  MY Exports       1579            10101       11117       1965            12837       13593       3483            15042       16895

  Dom Consumption  16694           90740       107434      18236           94932       113168      18930           99376       118306

  o.w. Feed        7343            41695       49038       8183            44998       53181       8620            48462       57082

  o.w. FSI         9351            49045       58396       10053           49934       59987       10310           50914       61224

  Ending Stocks    1566            9370        10936       6500            20241       26741       5331            20641       25972

  **Tot            19839           110211      129487      26701           128010      153502      27744           135059      161173
  Distribution**                                                                                                               
  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------

**Production**

Wheat Production

  ------------------------- --------------- --------------- ---------------
  1000 MT                   **03/04**       **04/05**       **05/06**

  France                    30,641          39,600          39,590

  Germany                   19,260          25,427          25,200

  United Kingdom            14,288          15,473          16,000

  Italy                     6,362           8,783           7,000

  Spain                     6,019           7,108           5,000

  Benelux                   2,845           3,144           3,175

  Austria                   1,193           1,719           1,786

  Denmark                   4,701           4,787           4,700

  Finland                   679             782             650

  Greece                    1,280           1,350           1,200

  Ireland                   794             962             880

  Portugal                  161             251             105

  Sweden                    2,036           2,409           2,170

  **EU15 Total**            **90,504**      **111,795**     **107,456**

  Cyprus                    13              8               10

  Czech R.                  2,638           5,042           4,500

  Estonia                   145             185             146

  Hungary                   2,900           5,800           4,100

  Latvia                    468             493             458

  Lithuania                 1,204           1,430           1,200

  Malta                     5               10              10

  Poland                    7,858           9,892           8,500

  Slovakia                  930             1,765           1,905

  Slovenia                  123             147             140

  **NMS 10 total**          **16,284**      **24,772**      **20,969**

  **EU-25 Total**           **106,788**     **136,567**     **128,425**
  ------------------------- --------------- --------------- ---------------

Source: FAS EU Posts.

For 05/06, preliminary estimates of EU-25 wheat production are 128.4
MMT, a decline of 5.6%. Area also declines by some 2.5%, from 23.2
hectares in MY 04/05 to 22.7 ha. in MY 05/06. In MY 04/05, the European
Commission eased the set-aside limit for one year from 10% to 5% due to
the grain shortages experienced in the EU following the drought stricken
03/04 harvest.

The estimate for 05/06 French production of 39.590 MMT (virtually the
same as output of 39.600 MMT in 04/05) reflects average yields and a
marginal increase in area planted to wheat. It should be noted that low
levels of precipitation during the winter left many areas in southern
France vulnerable to reduced yields should the summer of 2005 be
particularly hot or dry.

In Germany, the UK and the rest of northern Europe, the outlook for the
05/06 crop is average, where there has been reduced rainfall in the
winter, this is not expected to have any impact on yields.

In Iberia, serious drought conditions over the winter have led to
significant declines in the expected MY 05/06 harvest, down by 30%, or
2.2 MMT, for the entire peninsula, to 5.105 MMT from 7.359 MMT in MY
04/05.

In Italy, there is a significant reduction in the area planted to durum
wheat, with the area planted in 05/06 down by 0.5 M ha., or 28%. There
are two main reasons for this decline:

-   The implementation of the new CAP, establishing fully decoupled
    payments, including for durum wheat, was adopted in Italy in 2005.
    Many growers in central and southern Italy preferred to idle their
    marginal fields, where yields were minimal. A very limited shift to
    soft wheat and barley took place in the central regions; and

-   The low prices reported for durum during MY 04/05, following the
    record high crop of 2003. Since fall 2004 growers' durum prices
    averaged some 25 percent less than the previous year.

However, despite the area decline, the 2005 Italian durum crop should
reach a level very close to the 2003 record crop, due to the very good
weather conditions reported so far (plentiful rains during most of the
winter and early spring), while the area cut affected mainly the least
productive lands.

In the Czech Republic, for the MY 2005/06 harvest, weather has been very
good for winter crops and if it remains favorable in the spring,
expectations are of a good crop. The Polish MY 2005/06 wheat crop is
forecast to decline 14 percent because of lower yields, the effect of
less favorable, more typical weather patterns. Last year's total grain
crop of 29.6 MMT was a record high in Poland.

In Hungary, there may be a little switching from higher quality wheat
seeds towards lower quality higher yielding wheat varieties. As long as
the lower quality varieties still meet the criteria for EU intervention,
this could help to maximise a farmer's revenue. This type of effect of
adaptation to EU rules and procedures is likely to continue over the
coming couple of years in the NMS.

**Consumption**

Feed use of wheat in MY 05/06 is expected to rise to 57.1 MMT from 53.2
MMT the previous year, replacing barley and other coarse grains.

In the EU-15, grain use for the production of starch and gluten has been
steadily trending upwards by about 3-5 percent annually. In the Benelux,
wheat has reportedly increasingly being preferred above corn for the
production of starch. During the next two seasons, a stabilization of
the starch production is anticipated as a result of increased
competition from the sugar industry. Expansion of the Benelux ethanol
production capacity is not expected to take place before 2006, however
in Germany, ethanol plants are already coming on-line, with around 0.75
MMT wheat expected to be used as feedstock during MY 05/06.

Since July 2004, the Dutch and Belgian compound feed industry have used
grains at a maximum level; up to 60 percent in both pig and poultry
feed. This is mainly due to the good supply of wheat in the EU.

German feed use in MY 04/05 rose by about 600,000 MT, replacing Corn
Gluten Feed (not as result of Bt10), pulses, oilcakes, molasses and beet
pulp Grain feed use seems to be up particularly for on farm use.

In the Czech Republic, an excess of grains and limited transport
infrastructure prevent easy export of large quantities of grain, some of
the domestic grain surplus of 1.8 MMT in MY 04/05 may be burned for use
as an energy source in power generation, with Czech energy company, CEZ,
reported to be in negotiations to buy low quality wheat for burning.

**Trade**

EU wheat exports for MY 05/06 are provisionally estimated at 16.9 MMT,
based in particular on solid export performance to the traditional
destinations for EU wheat in the Mediterranean basin. A Memorandum of
Understanding is reported to have been signed between the Chinese grain
imports COFCO and France Export Cereals for the purchase of up to
500,000 MT of French wheat. Further details of the deal were not
available. While the deal is not reported to be watertight, if it is to
take place, it could be squeezed in towards the end of MY 04/05 or more
likely during MY 05/06.

EU wheat exports for MY 04/05 are currently estimated at 13.593 MMT,
though this figure will require French exports to North Africa to
continue at a solid pace. Should French export pace weaken in the last
two months of the campaign, the wheat will likely be offered into
intervention.

Flour exports continue to be under pressure due to increasing milling in
export destinations. While flour exports have increased from the poor
performance in 2003/04 when wheat in the EU was highly priced relative
to world market, they have not approached the levels seen in 2002/03.
For MY 04/05 to date (to late April), 2.1 MMT flour export licenses have
been claimed compared to 2.9 MMT in MY 02/03 and 1.6 MMT in MY 03/04
(all figures in wheat equivalents).

EU imports continue to be dominated by the import of wheat under quota
from Russia and the Ukraine as well as traditional imports of high
quality wheat from North America.

Italian durum imports are forecast to reach 1.3 MMT in 04/05, despite
the 2004 record high crop: poor quality (low protein content) of the
domestic production pushed the Italian pasta makers to buy large volumes
of high quality foreign wheat, especially from Canada, Australia, and,
to a lesser extent, the U.S. (desert durum from California and Arizona).
As a result (large crop and imports), durum ending stocks are expected
to grow significantly, up to 1.5 MMT next June.

Italian bread wheat imports in 2004/05 should remain virtually unchanged
at about 5 MMT, but with a significantly growing share from the Black
Sea (about 1 MMT). Feed use is expected to increase slightly this year,
while in 05/06 it could rise more significantly, following the forecast
reduction of domestic corn crop. Limited amounts of durum are also
reported for feed use during 04/05, explained by the low average quality
of the 2004 crop.

In Poland, forecast wheat imports in MY 2005/06 are estimated to be
about 200,000 tons. This is almost the same as the level imported in the
current MY 2004/05. Relatively high domestic production and large wheat
stocks will result in small imports, almost exclusively durum for pasta
production and high quality wheat necessary for blending with local
wheat for the baking industry. Imports are anticipated mainly from other
EU member sates. Wheat exports during MY 04/05 are rather minor. Some
wheat was exported early this MY to Algeria and Yemen without any
support.

**Stocks**

Over 8.5 MMT of wheat has already been offered into intervention during
MY 04/05 to date, a figure that could easily exceed 10 MMT before the
end of the intervention campaign. Of this wheat, 3.2 MMT is in the
NMS-10, notably 1.5 MMT of wheat offered into Hungarian intervention and
0.9 MMT in the Czech Republic.

While the drought reduced crop in MY 03/04 led to reduced wheat stocks
across the EU, the banner MY 04/05 harvest and moderate export
performance has helped to more than compensate, with stocks estimated to
be increasing in MY 04/05 from 10.9 MMT to 26.7 MMT. The outlook for
2005/06 is that stocks will stabilize at these levels to the end of MY
05/06. See the Policy/Intervention section for more discussion on the
intervention problems, particularly in central Europe.

# Barley

**PSD Table EU-25, Barley**

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ####  |       |       |       | (1000 |       |
|                     | ### B |       |       |       | HA)   |       |
|                     | arley |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 003** |       | 004** |       | 005** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 13397 | 1     | 13177 | 1     | 0     | 1     |
|                     |       | 3,418 |       | 3,052 |       | 2,860 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 8232  | 7,574 | 3976  | 5,011 | 0     | 1     |
|                     |       |       |       |       |       | 1,110 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 54687 | 5     | 61670 | 6     | 0     | 5     |
|                     |       | 4,772 |       | 1,729 |       | 4,968 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 700   | 639   | 350   | 350   | 0     | 344   |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 700   | 639   | 350   | 350   | 0     | 344   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 7     | 0     | 0     | 34    | 0     | 4     |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | **63  | **62, | **65  | **67, | **0** | **66, |
|                     | 619** | 985** | 996** | 090** |       | 422** |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 2766  | 2,180 | 2800  | 2,704 | 0     | 3,300 |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 984   | 2,180 | 2800  | 2,704 | 0     | 3,300 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 41020 | 4     | 38000 | 3     | 0     | 3     |
| Consumption         |       | 0,879 |       | 8,300 |       | 7,177 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 56877 | 5     | 53900 | 5     | 0     | 5     |
| Consumption         |       | 5,794 |       | 3,276 |       | 2,494 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 3976  | 5,011 | 9296  | 1     | 0     | 1     |
|                     |       |       |       | 1,110 |       | 0,628 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | **63  | **62, | **65  | **67, | **0** | **66, |
|                     | 619** | 985** | 996** | 090** |       | 422** |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

**Barley --NMS-10, EU-15 and EU-25**

  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------
  1000's MT        **2003/2004**                           **2004/2005**                           **2005/2006**               

                   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**

  Area             2811            10607       13418       2696            10356       13052       2638            10222       12860

  Beginning Stocks 944             6630        7574        584             4427        5011        1834            9276        11110

  Production       8100            46672       54772       9779            51950       61729       8358            46610       54968

  MY Imports       627             410         639         579             460         350         550             574         344

  Jul-Jun Import   0               0           0           0               34          34          0               4           4
  U.S.                                                                                                                         

  **Total Supply** **9671**        **53712**   **62985**   **10942**       **56837**   **67090**   **10742**       **56460**   **66422**

  MY Exports       310             2268        2180        317             3076        2704        490             3590        3300

  Dom Consumption  8777            47017       55794       8791            44485       53276       8807            43687       52494

  o.w. Feed        6563            34316       40879       6478            31822       38300       6434            30743       37177

  o.w. FSI         2214            12701       14915       2313            12663       14976       2373            12944       15317

  Ending Stocks    584             4427        5011        1834            9276        11110       1445            9183        10628

  **Tot            **9671**        **53712**   **62985**   **10942**       **56837**   **67090**   **10742**       **56460**   **66422**
  Distribution**                                                                                                               
  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------

**Production**

Barley production in the EU-25 in MY 05/06 is provisionally estimated to
decline to 55.0 MMT from 61.8 MMT in MY 04/05. The bulk of this
reduction is in Spain, where a drought affected 05/06 crop is forecast
at just 6.5 MMT compared to the good harvest of 10.6 MMT recorded in MY
04/05. Marginal area reductions in the UK, France and Germany as well as
slightly reduced yield outlooks for 05/06 lead to a smaller barley crop
in each of these countries than in MY 04/05: Germany 12.4 MMT (MY 04/05:
13.0 MMT); France: 10.5 MMT (11.0 MMT); UK 5.6 MMT (5.8 MMT).

Prospects for malting barley in France are reported to be good. In
Germany, minimal levels of winterkill ensured that area planted to
brewing barley dropped 6% with output expected down 14%.

In the NMS, barley production is forecast to decline by 1.4 MMT to 8.4
MMT due to a 2% area decline coupled with yields reverting to a more
typical level following the last campaign's high yields. In Hungary, a
17% area decline in winter barley plantings may be offset by expanded
spring barley acreage.

**Consumption**

The decline in barley feed use estimated for MY 05/06 is mainly
accounted for by a reduction in Spain where a 1.5 MMT fed barley use
decline is due to a the on going drought in Iberia reducing barley
availability. In northern Europe, feed quality wheat is reported to be
competitively priced against barley.

The closure of three malting plants, will see UK FSI consumption of
barley decline correspondingly in MY 05/06. In the north of The
Netherlands, a malting plant has been opened with a capacity to
transform 165,000 MT of barley, starting with 65,000 MT in 2004/2005.
Russia will reportedly be an important growth market for the plant.
During MY 04/05, Benelux malt exports increased by more than ten percent
and are expected to increase further during the next season. South
America has been an important export destination during MY 04/05.
Despite the fact that barley prices are at a low level, feed barley use
is limited due to the high availability of feed wheat.

**Stocks**

Some 2.1 MMT of barley has already been offered into intervention so far
during MY 04/05, with the bulk, 1.5 MMT, in Germany. Another 1 MMT
German barley could be offered into intervention before the end of the
marketing year. In MY 05/06, some UK barley could also end up in
intervention.

# Corn

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##    |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     |  Corn |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *10/2 |       | *10/2 |       | *10/2 |       |
|                     | 003** |       | 004** |       | 005** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 6006  | 6,033 | 6370  | 6,346 | 0     | 6,084 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 4826  | 4,406 | 3357  | 3,287 | 0     | 7,187 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 40052 | 4     | 53125 | 5     | 0     | 4     |
|                     |       | 0,075 |       | 2,946 |       | 7,158 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 5752  | 5,783 | 2500  | 2,429 | 0     | 2,792 |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 5752  | 5,783 | 2500  | 2,429 | 0     | 2,792 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 170   | 27    | 0     | 29    | 0     | 28    |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | **50  | **50, | **58  | **58, | **0** | **57, |
|                     | 630** | 264** | 982** | 662** |       | 137** |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 459   | 239   | 500   | 406   | 0     | 679   |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 459   | 239   | 500   | 406   | 0     | 679   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 36014 | 3     | 41300 | 4     | 0     | 4     |
| Consumption         |       | 5,955 |       | 0,358 |       | 0,128 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 46814 | 4     | 52700 | 5     | 0     | 5     |
| Consumption         |       | 6,738 |       | 1,069 |       | 0,025 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 3357  | 3,287 | 5782  | 7,187 | 0     | 6,433 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | **50  | **50, | **58  | **58, | **0** | **57, |
|                     | 630** | 264** | 982** | 662** |       | 137** |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

**Corn --NMS-10, EU-15 and EU-25**

  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------
  1000's MT        **2003/2004**                           **2004/2005**                           **2005/2006**               

                   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**

  Area             1739            4294        6033        1896            4450        6346        1971            4113        6084

  Beginning Stocks 1124            3282        4406        530             2757        3287        3343            3844        7187

  Production       7794            32281       40075       12319           40627       52946       10723           36435       47158

  MY Imports       716             5788        5783        198             3441        2429        130             4437        2792

  Oct-Sep Import   1               26          27          1               28          29          0               28          28
  U.S.                                                                                                                         

  **Total Supply** **9634**        **41351**   **50264**   **13047**       **46825**   **58662**   **14196**       **44716**   **57137**

  MY Exports       856             104         239         1465            151         406         2331            123         679

  Dom Consumption  8248            38490       46738       8239            42830       51069       8533            41492       50025

  o.w. Feed        7306            28649       35955       7113            33245       40358       7411            32717       40128

  o.w. FSI         942             9841        10783       1126            9585        10711       1122            8775        9897

  Ending Stocks    530             2757        3287        3343            3844        7187        3332            3101        6433

  **Tot            **9634**        **41351**   **50264**   **13047**       **46825**   **58662**   **14196**       **44716**   **57137**
  Distribution**                                                                                                               
  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------

**Production**

For MY 05/06, provisional estimates of EU-25 corn production suggest a
5.7 MMT drop in output to 47.2 MMT. The outlook for MY 05/06 is for
smaller crops in both Italy and France. A smaller French crop will
reduce availability by around 2 MMT and while feed use is forecast to
decline due to expectations of competitive feed wheat supplies, intra EU
export availability will also be down.

Italian corn area is forecast to decline by 12% in MY 05/06 due to:

-   Full decoupling in the regions where there was still a specific aid
    per hectare for corn;

-   Set-aside back to 10 percent

-   Partial shift to sugar beets and soybeans in northern Italy

-   Depressed domestic markets, with prices in the recent weeks
    averaging 30 to 35 percent less than one year ago

-   Need of a more significant rotation, in order also to prevent some
    rootworm attacks ("diabrotica virgifera")

In the NMS, corn output is pegged back to 10.7 MMT for MY 05/06,
following MY 04/05's exceptional 12.3 MMT output. In 05/06, the area
planted to Hungarian corn is expected to increase marginally, though the
05/06 crop is provisionally estimated to be 6.5 MMT, some 1.7 MMT
smaller than in MY 04/05 due to a return to more typical weather
conditions. With the current price of corn some EUR 2 to EUR 3/MT higher
than milling wheat, corn yields of 8 to 9 MT/hectare compared to 4 to 5
MT/ha. for wheat offer farmers a better return more than offsetting the
higher production costs involved.

In My 04/05, Italy recorded a record corn harvest. This helped lead to
lower domestic prices, substantial ending stocks as well as limiting
imports from locations such as Hungary. In France, a good crop also lead
to higher feed use and with the Hungarian corn surplus weighing on
French corn prices. The central European corn crop, and Hungarian in
particular, in MY 04/05 was excellent, with output increasing by over
50% to exceed 12 MMT.

Poland has only limited production of corn because of the short growing
season. However, since CY 1996, corn area and production have grown
rapidly in Poland. The area is six times as large and production is
seven times as much as compared to 1996 levels. Attractive corn prices
and the introduction of early varieties (shorter growing season
varieties) encouraged larger planting area and a resultant production
increase. While production has risen, Polish climatic conditions
continue to impede substantial long-term increases. MY 05/06 corn output
in Poland is provisionally estimated at a record 2.5 MMT, with area
planted to corn increasing 4% to 430,000 hectares.

**Consumption**

In MY 04/05, due to the good availability of the EU corn crop, the use
of corn in animal feeds, mainly poultry feed, has been at a high level.

In Italy, in terms of total supply in 2005/06 the expected reduced crop
from the record high level of 2004 will be partially offset by the
unusually large beginning stocks, as well as larger imports from both
France and Hungary. Feed use remains stable at about 10 MMT, in line
with static consumption from the domestic livestock industry.

**Trade**

With this year's drought in Spain and Portugal, Iberian feed grain
import requirements could rise by as much as 7 MMT to reach 17 MMT.
Typically, Spain and Portugal have imported 1.9 MMT and 0.5 MMT of corn
respectively under the abatement quotas dating from these countries
accession to the EU in the mid-1980's. It is possible that Hungarian
corn, a product that Spanish feed companies are reported to be
comfortable with, could replace some of these abatement quota imports
depending on market conditions.

While increased corn exports to the rest of the EU provided some relief
for the Hungarian corn market in MY 04/05, a great portion of
(intervention) grain stocks will remain in the country until the 2005
harvest. The most crucial time will be in September-October, 2005 when
corn and sunflower harvest starts. If market conditions improve, MY
05/06 grain exports of Hungary may be far above the current campaign's
1.75 MMT, to perhaps 2.5 MMT.

In case of improving demand (in the EU and extra-EU) the infrastructure
for grain transport (loading, transport) could be a limiting factor to
trade. While the Hungarian government plans to update ports, railway
access and facilities on the Danube river, currently railway car
availability and a low water level on Danube may also limit exports of
grains. Ambitious storage investments are also expected, adding between
0.7 MMT to 1.5 MMT, though these are only likely to be completed in the
next two to three years.

**Stocks**

Over 2.4 MMT of corn has already been offered into intervention in
Hungary, as well as an additional 0.2 MMT in Slovakia. It will be
interesting to see what approach the Commission decides to take
concerning the build up of corn intervention stocks in central Europe.

# Rye

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | #     |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     | # Rye |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 003** |       | 004** |       | 005** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 2572  | 2,568 | 2780  | 2,748 | 0     | 2,591 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 6061  | 6,223 | 3064  | 3,967 | 0     | 3,440 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 6931  | 6,904 | 10020 | 9,958 | 0     | 8,430 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 76    | 105   | 50    | 23    | 0     | 30    |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 42    | 105   | 50    | 23    | 0     | 30    |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | **13  | **13, | **13  | **13, | **0** | **11, |
|                     | 068** | 232** | 134** | 948** |       | 900** |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 626   | 509   | 650   | 516   | 0     | 800   |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 452   | 509   | 650   | 516   | 0     | 800   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 5137  | 4,201 | 5450  | 5,094 | 0     | 3,572 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 9378  | 8,756 | 9850  | 9,992 | 0     | 8,864 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 3064  | 3,967 | 2634  | 3,440 | 0     | 2,236 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | **13  | **13, | **13  | **13, | **0** | **11, |
|                     | 068** | 232** | 134** | 948** |       | 900** |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

**Rye --NMS-10, EU-15 and EU-25**

  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------
  1000's MT        **2003/2004**                           **2004/2005**                           **2005/2006**               

                   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**

  Area             1710            858         2568        1805            943         2748        1742            849         2591

  Beginning Stocks 494             5729        6223        155             3812        3967        553             2887        3440

  Production       3720            3184        6904        5113            4845        9958        4210            4220        8430

  MY Imports       78              66          105         25              185         23          20              35          30

  Jul-Jun Import   0               1           1           0               1           1           0               0           0
  U.S.                                                                                                                         

  **Total Supply** **4292**        **8979**    **13232**   **5293**        **8842**    **13948**   **4783**        **7142**    **11900**

  MY Exports       18              530         509         178             525         516         5               820         800

  Dom Consumption  4119            4637        8756        4562            5430        9992        4447            4417        8864

  o.w. Feed        1782            2419        4201        2092            3002        5094        1962            1610        3572

  o.w. FSI         2337            2218        4555        2470            2428        4898        2485            2807        5292

  Ending Stocks    155             3812        3967        553             2887        3440        331             1905        2236

  **Tot            **4292**        **8979**    **13232**   **5293**        **8842**    **13948**   **4783**        **7142**    **11900**
  Distribution**                                                                                                               
  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------

Following the low price of German rye in the second half of 2004 of
around EUR 65-70/MT, area planted for the 05/06 harvest fell by 10%. Low
prices also stimulated feed use, rising in Germany in MY 04/05 to 1.6
MMT from 1.3 MMT in MY 03/04, as well as seeing increased exports of rye
for feed use to the Netherlands. Prices in Poland also slipped to around
EUR 58-74 encouraging some limited exports of rye to EU markets.

However in MY 05/06, German exports of rye to the EU internal market are
expected to fall off due to both the decreased availability as well as
additional demand for rye in eastern Germany for use as feedstock in
bio-ethanol production. In 05/06, around 800,000 MT rye is expected to
be used for bio-ethanol, with eventually 1.5 to 1.6 MMT of grain (likely
either wheat or rye) being used by the plants once they become fully
operational.

There are still significant intervention stocks of rye held in Germany,
around 2.4 MMT to the end of March out of 2.66 MT held across the entire
EU. It remains to be seen how the Commission will try and release these
stocks, the mostly likely route being via export tenders, though it is
also possible that the Commission could release some of the rye at below
intervention prices (EUR 101/MT) on EU markets too.

# Sorghum

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##### |       |       |       | (1000 |       |
|                     | ## So |       |       |       | HA)   |       |
|                     | rghum |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 003** |       | 004** |       | 005** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 98    | 102   | 87    | 89    | 0     | 107   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 40    | 57    | 31    | 24    | 0     | 21    |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 380   | 405   | 478   | 493   | 0     | 568   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 1587  | 1,509 | 225   | 237   | 0     | 237   |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 1172  | 1,509 | 225   | 237   | 0     | 237   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Import U.S. | 726   | 872   | 0     | 121   | 0     | 125   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 2007  | **1,  | 734   | **    | 0     | **    |
|                     |       | 971** |       | 754** |       | 826** |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 6     | 6     | 5     | 3     | 0     | 5     |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 4     | 6     | 5     | 3     | 0     | 5     |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 1958  | 1,922 | 710   | 704   | 0     | 768   |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 1970  | 1,941 | 725   | 730   | 0     | 795   |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 31    | 24    | 4     | 21    | 0     | 26    |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 2007  | **1,  | 734   | **    | 0     | **    |
|                     |       | 971** |       | 754** |       | 826** |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

# Oats

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##    |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     |  Oats |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 003** |       | 004** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 2911  | 2,905 | 2767  | 2,684 | 0     | 2,662 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 1010  | 929   | 866   | 820   | 0     | 879   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 8655  | 8,623 | 8650  | 8,728 | 0     | 7,743 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 11    | 3     | 10    | 0     | 0     | 0     |
| Imports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Imports     | 11    | 3     | 10    | 0     | 0     | 0     |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | **9   | **9,  | **9   | **9,  | **0** | **8,  |
|                     | 676** | 555** | 526** | 548** |       | 622** |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Mkt. Yr.      | 534   | 494   | 500   | 448   | 0     | 336   |
| Exports             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Oct-Sep Exports     | 443   | 494   | 500   | 448   | 0     | 336   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 6583  | 6,650 | 6400  | 6,721 | 0     | 6,143 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 8276  | 8,241 | 8080  | 8,221 | 0     | 7,642 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 866   | 820   | 946   | 879   | 0     | 644   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | **9   | **9,  | **9   | **9,  | **0** | **8,  |
|                     | 676** | 555** | 526** | 548** |       | 622** |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

Swedish and Finnish oat production is expected to decline in MY 2005/06
to a combined output of 1.843 MMT from 1.931 MMT in MY 04/05. Across the
EU-25 as a whole, oat production in MY 05/06 is expected to decline by 1
MMT to 7.7 MMT. Oat prices have declined by between 5% to 7% in
Scandinavia which has reduced the relative profitability of oat
production. Uncertainties created by the CAP Reform are also leading to
reduced plantings of all spring crops in Sweden.

Lower oats availability is likely to lead to reduced extra-EU exports,
these are provisionally estimated at 336,000 MMT for 05/06, down from
450,000 MT for MY 04/05.

# Mixed Grain

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ####  |       |       |       | (1000 |       |
|                     | ### M |       |       |       | HA)   |       |
|                     | ixed  |       |       |       | (1000 |       |
|                     | Grain |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *07/2 |       | *07/2 |       | *07/2 |       |
|                     | 003** |       | 004** |       | 005** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 3600  | 3,910 | 3610  | 4,108 | 0     | 3,977 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 541   | 841   | 229   | 335   | 0     | 1,444 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Production          | 11688 | 1     | 14720 | 1     | 0     | 1     |
|                     |       | 2,291 |       | 6,222 |       | 4,261 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL SUPPLY        | 12229 | 1     | 14949 | 1     | 0     | 1     |
|                     |       | 3,168 |       | 6,572 |       | 5,731 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Feed Dom.           | 11300 | 1     | 12900 | 1     | 0     | 1     |
| Consumption         |       | 2,172 |       | 4,425 |       | 4,054 |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 12000 | 1     | 13600 | 1     | 0     | 1     |
| Consumption         |       | 2,834 |       | 5,127 |       | 4,769 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 229   | 335   | 1349  | 1,444 | 0     | 962   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL DISTRIBUTION  | 12229 | 1     | 14949 | 1     | 0     | 1     |
|                     |       | 3,168 |       | 6,572 |       | 5,731 |
+---------------------+-------+-------+-------+-------+-------+-------+

Note: All values in 1000 MT, except Area Harvested row in 1000 HA.

Source: FAS EU Posts, not official FAS data.

# Rice

+---------------------+-------+-------+-------+-------+-------+-------+
| **Country**         | **EU  |       |       |       |       |       |
|                     | -25** |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Commodity**       | ##    |       |       |       | (1000 |       |
|                     | ##### |       |       |       | HA)   |       |
|                     |  Rice |       |       |       | (1000 |       |
|                     |       |       |       |       | MT)   |       |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | 2002  | *     | 2003  | **    | 2004  | **    |
|                     |       | *Revi |       | Estim |       | Forec |
|                     |       | sed** |       | ate** |       | ast** |
+---------------------+-------+-------+-------+-------+-------+-------+
|                     | USDA  | *     | USDA  | *     | USDA  | *     |
|                     | Off   | *Post | Off   | *Post | Off   | *Post |
|                     | icial | Est   | icial | Est   | icial | Est   |
|                     | \[    | imate | \[    | imate | \[    | imate |
|                     | Old\] | \[Ne  | Old\] | \[Ne  | Old\] | \[Ne  |
|                     |       | w\]** |       | w\]** |       | w\]** |
+---------------------+-------+-------+-------+-------+-------+-------+
| **Market Year       | *     |       | *     |       | *     |       |
| Begin**             | *09/2 |       | *09/2 |       | *09/2 |       |
|                     | 003** |       | 004** |       | 004** |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Area Harvested      | 409   | 407   | 417   | 426   | 0     | 418   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Beginning Stocks    | 960   | 703   | 969   | 783   | 0     | 807   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Milled Production   | 1723  | 1,719 | 1876  | 1,864 | 0     | 1,803 |
+---------------------+-------+-------+-------+-------+-------+-------+
| Rough Production    | 2754  |       | 2998  |       | 0     |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| MILLING RATE        | 6257  |       | 6257  |       | 0     |       |
| (.9999)             |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Imports       | 1020  | 1,135 | 1000  | 938   | 0     | 951   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Imports     | 1000  | 1,135 | 1050  | 938   | 0     | 951   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Import U.S. | 0     | 263   | 0     | 255   | 0     | 262   |
+---------------------+-------+-------+-------+-------+-------+-------+
| **TOTAL SUPPLY**    | **3   | **3,  | **3   | **3,  | **0** | **3,  |
|                     | 703** | 557** | 845** | 585** |       | 561** |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Exports       | 225   | 204   | 250   | 159   | 0     | 163   |
+---------------------+-------+-------+-------+-------+-------+-------+
| Jan-Dec Exports     | 225   | 204   | 300   | 159   | 0     | 163   |
+---------------------+-------+-------+-------+-------+-------+-------+
| TOTAL Dom.          | 2509  | 2,570 | 2529  | 2,618 | 0     | 2,607 |
| Consumption         |       |       |       |       |       |       |
+---------------------+-------+-------+-------+-------+-------+-------+
| Ending Stocks       | 969   | 783   | 1066  | 807   | 0     | 791   |
+---------------------+-------+-------+-------+-------+-------+-------+
| **TOTAL             | **3   | **3   | **3   | **3   | **0** | **3   |
| DISTRIBUTION**      | 703** | 557** | 845** | 584** |       | 561** |
+---------------------+-------+-------+-------+-------+-------+-------+

With area payments for rice still partially coupled to production,
little change is expected to the area planted to rice, which remains
close, or slightly exceeds the maximum guaranteed area (area eligible
for support). In Italy, area is projected to decline only slightly, by
1%. Prices for paddy rice have remained well above the new intervention
price of EUR 150 due to solid demand in the EU, particularly from the
NMS, for example with the Italian paddy price averaging EUR 190 to EUR
200 in MY 04/05.

**Rice --NMS-10, EU-15 and EU-25**

  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------
  1000's MT        **2003/2004**                           **2004/2005**                           **2005/2006**               

                   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**   **NMS 10**      **EU-15**   **EU-25**

  Area             3               404         407         3               423         426         3               415         418

  Beginning Stocks 8               695         703         17              766         783         5               802         807

  Prod\'m, milled  7               1712        1719        8               1856        1864        7               1796        1803

  MY Imports       283             945         1135        245             887         938         255             919         951

  MY Import U.S.   13              250         263         3               252         255         4               258         262

  **Total Supply** **298**         **3352**    **3557**    **270**         **3509**    **3585**    **267**         **3517**    **3561**

  MY Exports       2               295         204         2               351         159         1               385         163

  Dom Consumption  279             2291        2570        263             2355        2618        261             2346        2607

  Ending Stocks    17              766         783         5               802         807         5               786         791

  **Total          **298**         **3352**    **3557**    **270**         **3508**    **3584**    **267**         **3517**    **3561**
  Distribution**                                                                                                               
  ---------------- --------------- ----------- ----------- --------------- ----------- ----------- --------------- ----------- -----------

The impact of the addition of the 10 New Member States on rice trade can
be clearly seen -- whereas prior to enlargement, the main rice imports
came from Asian origins such as Vietnam, Thailand and India, usually
lower quality milled rice for price sensitive consumers. Since
enlargement, with the NMS adopting the EU tariff, imports have switched
to largely European origins, particularly Italy. In Poland, this has led
to higher prices, as a result consumption is estimated to have declined
around 10% to 90,000 MMT per year.

Thus enlargement has presented an excellent opportunity for the Italian
rice sector. Exports to third countries, on the contrary, are declining
due to both reduced food aid programs and the lack of EU export
restitutions to the Mediterranean basin.

Since September 1, 2004, with the introduction of the new rice regime,
EU import tariffs for brown rice have been EUR 65/MT and for milled rice
EUR 175/MT. Following prolonged negotiations, the European Commission
and the United States agreed to a mechanism which bases the brown rice
tariff based on import licenses used every six months. On September 1
and March 1, the European Commission will calculate the new brown rice
import duty which can either be reduced to EUR 30, EUR 42.5 or remain at
EUR 65.

This agreement has yet to be approved by the Council and published in
the Official Journal, but it is expected that for the period March 1
2005 to August 31, 2005 that the Commission will announce that brown
rice imports into the EU face a tariff of EUR 42.5. For imports that
have already taken place between March 1 and whenever the Agreement
could be published in the Official Journal (possibly in early June,
assuming that it is approved by the May 30 2005 Agriculture Council),
then the difference between the tariff paid (EUR 65) and the new lower
tariff (EUR 42.5) should be reimbursed to the importer. See GAIN Report
E35041 for more details. It is not yet clear how the Commission might
respond to requests from Thailand to reduce the milled rice import
tariff.

# Feed Use

  ------------- ----------- ----------- ----------- ----------- -----------
                            **02/03**   **03/04**   **04/05**   **05/06**

  EU-15         Wheat       48671       41695       44998       48462

                Barley      31931       34316       31822       30743

                Corn        32628       28649       33245       32717

                Others      14042       14453       15154       12768

                Total       127272      119113      125219      124690

  NMS-10        Wheat       9029        7343        8183        8620

                Barley      6914        6563        6478        6434

                Corn        7497        7306        7113        7411

                Others      11665       10494       11790       11769

                Total       35105       31706       33564       34234

  EU-25         Wheat       57700       49038       53181       57082

                Barley      38845       40879       38300       37177

                Corn        40125       35955       40358       40128

                Others      25707       24947       26944       24537

                Total       162377      150819      158783      158924
  ------------- ----------- ----------- ----------- ----------- -----------

For MY 05/06 increased use of wheat as feed is predicted, offsetting
declines in barley, rye and mixed grain availability.

In the Benelux, during MY 04/05, feed use of soybean meal has been at a
low level, about 5 percent in pig and cattle feed, and 10 percent in
poultry feed. During the new season, use of soybean meal could recover
depending on the crop in South America. Soybean meal has partly been
replaced by lysine, peas and rapeseed meal. Rapeseed meal is
increasingly used due to the growing crushing of rapeseed for biodiesel.
During MY 04/05, rapeseed meal has been a competitive source of protein
but prices could increase to the high demand. If rapeseed meal prices
increase, demand for corn gluten feed is expected to increase. Use of
Sunflower meal is limited due to the low production. Consumption of
tapioca has dropped significantly and is currently solely used in pig
feed at a ratio of about 5 percent. Next season, EU tapioca consumption
is not expected to recover as the Thai production is limited and most of
the production is expected to be exported to China.

## Feed Developments in Hungary, Poland and the Czech Republic:

Polish feed grain consumption in MY 2005/06 is forecast to increase
about seven percent compared to MY 2004/05. Forecast demand for feed
should increase as a result of a significant increase in poultry
production and an expected increase in swine inventories and pork
production. Pork production is lower in current MY but will undoubtedly
increase in MY 2005/06, stimulated by increased slaughter pork prices
and increased production profits because of cheep grains. This is partly
the result of larger exports to EU-25 member states. Pork production
declined during the first half of CY 2005, but is expected to increase
in the second half of the year. Swine numbers are forecasted to be 7
percent higher at the end of 2005. Additionally it is expected that the
prevailing upward trend in poultry production will result in a 7 percent
increase in broiler production and a 4 percent increase in turkey
production. In response to an upward trend in pork and poultry
production farmers are willing to store grain because they foresee
increased demand and higher prices.

Total Polish commercial feed production in CY 2004 increased to 5.5 MMT,
up 2 percent from the CY 2003 level. In addition an increase of almost 5
percent in commercial feed production is forecasted for CY 2005. Of the
total commercial feed production (5.5 MMT) in 2004, compound feed
production was 4.9 million tons, up 2% and concentrated protein feed
production was 545,000 tons (used mainly in hog production), level
similar to CY 2003. Concentrated protein feeds are used in hog
production to be mixed with on-farm feed components.

In Hungary, little more than a moderate increase in the pattern of feed
use could be expected in the coming campaign despite the widespread
availability of feed grains. Poultry production is expected to be static
in MY 05/06 with further declines in pig output also possible, as well
as reduced output from feed mills expected, with production possibly
falling as low as 3.8 MMT in 2005 from 4.8 MMT in 2003. This could be
offset by increased substitution at the farm level of protein feeds by
domestic feed grains. Also intervention prices are also acting to keep
feed grain prices (or at least expectations) high.

In the Czech Republic, higher use of grains in feed mixtures is not a
solution for grain overproduction. Livestock numbers have been
decreasing (lower meat consumption, higher milk efficiency) and will not
increase. Compound feed mixes are unlikely to see anything more than a
marginal increase in grain incorporation.

# Intervention

**EU Intervention Stocks, 2004/05**

  -------------- ------------ ----------- ------------ ----------- ----------- -------------
  MT             **Total**    **Wheat**   **Barley**   **Rye**     **Corn**    **Sorghum**

  Beginning      3,637,077    193,687     110,919      3,332,471   0           0
  Stocks                                                                       

  New Grains,    12,886,413   7,782,269   2,089,389    0           3,012,314   2,440
  total                                                                        

  Of which       5,923,999    4,069,213   341,318      0           1,511,028   2,440
  Offered                                                                      

  Of which       6,962,414    3,713,056   1,748,071    0           1,501,286   0
  Accepted                                                                     

  Disposals      1,411,365    801,351     191,996      418,018     0           0

  Of which       1,346,121    777,530     191,906      376,685     0           0
  exports                                                                      

  Balance        15,112,125   7,174,605   2,008,312    2,914,453   3,012,314   2,440
  -------------- ------------ ----------- ------------ ----------- ----------- -------------

Data to April 24, 2005.

Source: European Commission

Note: Grain is offered into intervention, then it is either accepted or
rejected. Not all grain offered will necessarily be accepted into
intervention, if the grain fails to meet the criteria set out.

Note: Balance is beginning stocks plus total new grains, minus
disposals.

In the Spring of 2005, in order to help alleviate the pressures created
by the influx of grain into central European intervention stores, the
European Commission announced export tenders from intervention stores
for Austria (80,633 MT), Hungary (320,000 MT), Poland (93084 MT), and
the Czech Republic (300,000 MT). Effectively the Commission subsidizes
the transport cost of shipping the grain to sea port from these
land-locked countries.

# Related Reports

**Visit our website:** our website
**[www.useu.be/agri/usda.html]{.underline}** provides a broad range of
useful information on EU import rules, agricultural and trade policy, as
well as allowing easy access to USEU reports, trade and other practical
information.

E-mail: AgUSEUBrussels@usda.gov

**Apr 25 2005 \| Slovakia \| LO5003 [Grain Update\--Spring Planting
Targets](http://www.fas.usda.gov/gainfiles/200504/146119476.pdf)**

Highlight: Sowing area for spring barley in 2005 is set at 208,000
hectares. Sowing area for spring wheat is expected at 11,300 hectares,
representing an increase of 300 ha from 2004. Oat production in Slovakia
has been on the rise since 2000 and is expected to continue with 25,000
hectares sown in 2005. Sowing area for corn is expected to increase with
plantings at 150,000 hectares in 2005. The Ministry of Agriculture
recommends a minimum sowing area of 15,000 hectares for peas. Peas are
an important feed crop in Slovakia.

  ---------------------------------------------------------------------- ---
  **Mar 2 2005 \| EU-25** \| **E35041** [**EU and US agree on new EU      
  brown rice import tariff                                               
  scheme** ](http://www.fas.usda.gov/gainfiles/200503/146118960.pdf)\    
  ![](media/image2.png){width="1.0416666666666666e-2in"                  
  height="3.125e-2in"}                                                   

  *Highlight:* The US and EU have agreed on modifications to the EU\'s   
  import regime for brown rice. Should EU imports of brown rice remain   
  similar to historical levels, the import tariff will be cut from EUR   
  65 (per metric ton) to EUR 42.5. If trade levels drop then the tariff  
  will be lowered to EUR 30. Should there be a substantial increase in   
  EU imports then the tariff could revert to the current EUR 65. EU      
  import levels will be assessed once every six months in March and      
  September. The EU still has to approve the agreement for it to enter   
  into force. USTR expects the agreement to enter into force             
  retroactively on March 1, 2005.                                        
  ![](media/image2.png){width="1.0416666666666666e-2in"                  
  height="3.125e-2in"}                                                   
  ---------------------------------------------------------------------- ---

  ---------------------------------------------------------------------- ---
  **Feb 16 2005 \| Germany** \| [**GM5008 Grain Production Forecast       
  2005** ](http://www.fas.usda.gov/gainfiles/200502/146118847.pdf)\      
  ![](media/image2.png){width="1.0416666666666666e-2in"                  
  height="1.0416666666666666e-2in"}                                      

  *Highlight:* FAS Bonn forecasts the German grain crop for 2005 at 49.5 
  MMT, almost as high as in 2004. Since domestic demand is not foreseen  
  to change significantly, exports in MY 2005/06 will have to rise or    
  stocks will build up. Some additional domestic demand may arise from   
  the use of grains for energy production, fuels and gas.                
  ![](media/image2.png){width="1.0416666666666666e-2in"                  
  height="3.125e-2in"}                                                   
  ---------------------------------------------------------------------- ---

  ---------------------------------------------------------------------- ---
  **Feb 15 2005 \| Czech Republic** \| **EZ4017** [**Crop Situation       
  Update** ](http://www.fas.usda.gov/gainfiles/200502/146118795.pdf)\    
  ![](media/image2.png){width="1.0416666666666666e-2in"                  
  height="3.125e-2in"}                                                   

  *Highlight:* This year's weather conditions are favorable for Czech    
  grain production in MY 2004/05. After a significant drop last year,    
  production should return to MY 2002/03 levels with total grain         
  production of 6.5 million MT and wheat production at 3.6 million MT.   
  However, barley and rye areas are smaller and production will be lower 
  this year compared to MY 2003/04 with barley production at 1.8 million 
  MT and rye production at 109 thousand MT. Corn production will be      
  631,000 MT, a 32% increase.                                            
  ---------------------------------------------------------------------- ---

  ---------------------------------------------------------------------- ---
  **Feb 7 2005 \| Italy** \| **IT5004** [**Italy Wheat                    
  Update** ](http://www.fas.usda.gov/gainfiles/200502/146118718.pdf)\    
  ![](media/image2.png){width="1.0416666666666666e-2in"                  
  height="3.125e-2in"}                                                   

  *Highlight:* Italy continues to be among the world\'s most important   
  wheat importing countries, reaching the top position in 2001/02. This  
  report looks at wheat trade, production and wheat milling with         
  discussion of differences among Italy\'s north, central and southern   
  regions.                                                               
  ---------------------------------------------------------------------- ---

  ------------------------------------------------------------------------ ---
  **Jan 24 2005 \| EU-25** \| **E35011** [**EU to use wheat export          
  subsidies** ](http://www.fas.usda.gov/gainfiles/200501/146118541.pdf)\   
  ![](media/image2.png){width="1.0416666666666666e-2in"                    
  height="3.125e-2in"}                                                     

  *Highlight:* The European Commission has announced that it will begin    
  using export subsidies for wheat during the remaining five months of the 
  2004/05 Marketing Year (MY). This week, the EU launched a procedure so   
  that up to 2 MMT of wheat could receive export subsidies. This move      
  follows growing market and political pressure for wheat export subsidies 
  following the large 2004 harvest and building EU grain intervention      
  stocks as well as EU wheat\'s weak competitive position in key North     
  African markets.                                                         
  ------------------------------------------------------------------------ ---

  ----------------------------------------------------------------------------- ---
  **EU-25** \| **E34100 EU Grain**                                               
  [**Semi-Annual** ](http://www.fas.usda.gov/gainfiles/200412/146118238.pdf)\   
  ![](media/image2.png){width="1.0416666666666666e-2in" height="3.125e-2in"}    

  *Highlight:* With a banner grain harvest of 285 MMT across the EU-25,         
  domestic grain supplies are considerably higher than domestic feed and food   
  requirements. This has lead to depressed prices on the EU market. However,    
  with the Euro rising against the US Dollar, the export outlook for EU grains  
  is not spectacular, particularly with the European Commission having only     
  granted export subsidies for barley so far during MY 04/05. While EU imports  
  for all grains are expected to be limited, there remains a good market for    
  traditional high protein wheat imports from North America.                    
  ----------------------------------------------------------------------------- ---