March 28, 2012

 

Winterkill causes West Europe farmers to switch to corn

 

 

Analysts said that Western Europe farmers, as they re-seed fields which suffered significant crop losses this winter, are turning to corn and spring barley, while dry weather is set to boost early planting progress.

 

In France, the top cereals producer in the EU, corn should gain the most hectares as its sowing period is just beginning, they added. Crop damage in France is most severe in the eastern part of the country. Preliminary estimates suggest between 500,000-600,000 hectares of winter soft wheat and barley could have been hit in France, according to trade and farmer estimates.

 

"The malting barley and corn sectors are very well developed in eastern France and the market is rather good for these two products," a grain trader said. French corn producers group AGPM expects the corn area in the country to grow by 2-3% this year versus 2011. The corn area was 1.6 million hectares in 2011.

 

"Sowings are starting timidly in the earliest regions and should certainly be generalised next week if weather conditions are favourable," it said in a note on Monday (Mar 26).

 

The German Farming Association last week warned the country's crop will suffer significant winterkill this year but gave no estimate of the area to be re-seeded. Market estimates are that 10-15% of wheat plantings may have suffered damage, a feeling underlined by brisk seed sales causing shortages in some areas.

 

"Sales of spring seeds have been very strong and seeds have even sold out in some areas," one German analyst said. "Imports of seed have been made from Italy, Britain and Austria."

 

"I think farmers will turn to corn, spring barley and spring wheat. Rapeseed seems to have come through the cold snap in better shape and will probably not need much re-sowing."

 

The spell of dry weather which has spread across Western Europe has led to good early planting progress in Britain.

 

"The conditions are ideal for spring cropping so we should be well ahead of the average," Home-Grown Cereals Authority analyst Jack Watts said.

 

The area planted with spring crops is likely to be little changed in Britain with a fall in England set to be offset by a rise in Scotland. Watts said favourable weather and strong forward prices boosted the area planted with winter crops in England.

 

"That is going to restrict the amount of land available for spring cropping and even though we have quite strong forward barley prices even the spring barley area will likely fall in England," Watts said.

 

Spring barley is the most important spring planted cereals crop in both England and Scotland. Last year there were 316,000 hectares of spring barley planted in England and around 263,000 hectares in Scotland with the gap set to narrow this season.

 

The planting of winter crops in Scotland this season was disrupted by wet conditions, increasing the potential area for spring crops. The dry weather which has helped plantings to progress may ultimately pose a threat to crops if it continues well into April, Watts said.

 

Spanish farmers expect to plant substantially less corn in one region, Aragon, where irrigation reserves have fallen after the driest winter in at least 65 years, which may increase the country's heavy dependence on grain imports.

 

They expected plantings to be roughly the same elsewhere for corn, the most important crop planted in spring. Farmers almost finished sowing wheat and barley in the autumn and winter.

 

"With current water stocks it is hard to think corn and rice plantings in affected areas will be more than 20% of what they are in the current campaign," a report from the Mercolleida agricultural exchange said of the Aragon region.

 

Aragon typically produces about one-fifth of Spain's corn crop, which came in at 4.2 million tonnes in the 2011-12 cycle. In Italy, dry soil in some non-irrigated areas in the main growing regions of Lombardy and Veneto could also trigger delays in corn sowing, traders said.

 

Italy, a major grain importer in the EU, has planted more wheat for the 2012 crop and is expected to sow more corn this spring encouraged by high prices, the country's agricultural research centre ISMEA said on Friday.

 

Soft-wheat plantings are estimated to have risen about 17% to 621,000 hectares, while corn plantings are expected to rise by about 2.6% to about one million hectares, a level unseen since 2007, ISMEA said.