PARIS- Strategie Grains has sharply increased its forecast for this year's maize crop in the European Union due to good harvest yields and a revision to Polish estimates, it said on Thursday.

In a monthly grain report, the consultancy projected 2021 maize production in the 27-nation European Union at 67.5 million tonnes, up from 64.9 million tonnes expected previously and above the 2020 crop of 64.6 million tonnes.

Farmers are gathering maize in Europe, with a slow start to field work in some countries increasing attention on harvest prospects. 

The higher production outlook led Strategie Grains to trim its forecast for EU maize imports in the 2021/22 season to 13.9 million tonnes from 14.4 million last month and now slightly below the 2020/21 level.

Despite the expected rise in harvest supply, EU maize stocks this season "will remain rather tight", the consultancy said as it revised up demand for maize.

Competitive prices versus wheat and barley were attracting greater maize use in livestock feed and industrial products like starch, it said.

However, it warned that high commodity costs could curb demand from livestock farmers going forward.

Improving margins for ethanol were also expected to lead to higher demand for maize for biofuels compared with last season, it added.

For wheat, rising prices were reducing competitiveness for exports as well as feed use, particularly for French wheat.

Expected French wheat exports in 2021/22 had been lowered by over 500,000 tonnes since last month, notably to Algeria, and French prospects in Morocco and sub-Saharan Africa would also be cut if prices stay high, Strategie Grains said.

However, it increased its forecast for all-EU soft wheat exports in 2021/22 by 1 million tonnes to 32 million, partly to take account of large exports already secured by Bulgaria, Romania and the Baltic countries.

Wheat supplies were still expected to be very tight by the end of the season, despite a slight increase to Strategie Grains' estimate of EU soft wheat production.

Barley prices were also expected to remain high and stocks low, with a reduced harvest estimate partly offsetting the loss of some export demand to Australia and feed demand to maize, it said.

(Reporting by Gus Trompiz; editing by Jason Neely and Kim Coghill) ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))