Spanish grain stocks in ports and warehouses are declining as dealers and consumers in the major importer wait to see how the domestic wheat and barley harvest fares next month, trade sources say. Unlike northern European exporters, Spain is not suffering from drought, and although weather in May will be crucial, farmers are cautiously optimistic.
Traders said they did not expect farmers to sell new crop this summer as keenly as they did last year, because many failed to cash in on a subsequent rally to three-year highs. "It looks as if the first stretch of the 2011-12 market year will see buyers living from hand to mouth until wheat shipments arrive in the summer or the maize harvest is in," said a report from the Mercolleida agricultural exchange.
"Farmers will probably bet on not selling during the harvest and waiting to see what happens, basically what happens in the international market and the 'beacon of the West' that is Chicago." Even in bumper years, Spanish harvests are never enough to meet domestic demand and the country needs to import at least 10 million tonnes of cereal a year, a market which lures sellers from Kazakhstan to Argentina.
No significant wheat shipments have docked for months in Spain's leading grains port, Tarragona, due to high prices, and maize shipments have also ceased in recent weeks due to a rally. Unloading in Tarragona were 55,000 tonnes of French barley and 40,000 tonnes of US sorghum, currently ingredients of choice for Spain's animal feed industry, the second biggest in Europe. Wheat stocks in Tarragona were estimated at 70,000 tonnes, maize at 90,000 and sorghum at 50,000.
Daily loadings were about 10,000 tonnes, which is a little more than a month ago but still below average due to weak demand from crisis-hit livestock farmers. Small cargoes of barley released under a European Union aid programme have also been docking in Tarragona and other Spanish ports. The roster for Spain's number-two grains port Cartagena showed 46,500 tonnes of barley was unloading there.