July 7, 2004

Italian 2004-05 Grain Harvest Progressing Well

The Italian 2004-05 grain harvest has been progressing well with the hard wheat harvest nearly finished, feed barley harvest well underway, and the first cuts of soft wheat being made, so that participants' focus has turned to quality, sources said Tuesday.
 
Hard wheat yields have been sharply up on the year, while quality appears to be sufficiently good to use the wheat to make pasta, one Italy-based trader said.
 
Quality varies somewhat between regions, but is average overall, Paolo Margaraja, agronomist from the Italian cooperatives confederation Coldiretti said.
 
In its latest update June 22, the Italian government's agricultural statistics agency ISMEA pegged 2004-05 hard wheat output at 4.768 million metric tons, up 25% on the year, while Margaraja said production of up to five million tons was possible.
 
For soft wheat, quality assessment is expected to start this week, but the outlook appears mixed. Rains during June may have diluted protein content so much so that a large proportion of the Italian soft wheat harvest might be classed as feed wheat, a trader said.
 
However, it is early days for the harvest so that definite assessments cannot yet be made, sources said.
 
"We're going on a tour around Perugia (central Italy) soon, where quality seems a little better," the trader said, while he did not take reports of good average protein content of 11% to 12% in southwest France as an indication for Italy: "Southwest France had hot weather in the beginning of June, we had rain," he said.
 
The price outlook for the Italian soft wheat market is bearish presently due to low offers of Black Sea origin wheat, which are lower than domestically grown wheat, traders said.
 
ISMEA pegged soft wheat output for 2004-05 at 2.931 million tons, up 16.2% on the year.
 
However, a repetition of 2002-03, when Black Sea cheap offers depressed world market and European Union prices significantly does not appear likely, especially due to quality concerns for the Black Sea region and lower production than during 2002-03, even though predictions remain speculative at this point, a trader said.
 
For barley, yields are also up on the year, but barley plantings take up only a small area and output is mostly used for feed purposes.