July 13, 2012

EU 2012 grain crop estimates down on weather conditions

EU's major grain crop estimates for 2012 have been slashed by Strategie Grains on Thursday (July 11) to take account of weather problems across the bloc, both drought and excessive rain, and warned of further reductions.

The main cut concerned the corn crop, seen 850,000 tonnes lower than last month at 65.1 million tonnes, now down 2% on 2011, following hot and dry weather in central and south eastern Europe.

The analyst also lowered its estimate for the EU's soft wheat crop by 600,000 tonnes to 123.6 million tonnes to take account of a drought in Spain (-580,000 tonnes) and excessive rainfall in Britain (-240,000 tonnes). Output in Central Europe was also revised down due to drought at the end of the cycle.

The 27-member bloc's soft wheat is still expected 4% below last year.

For barley, Strategie Grains lowered its crop estimate by 700,000 tonnes this month to 52.5 million tonnes, down from 51.6 million in 2011. Spain accounted for much of the reduction (-850,000 tonnes) but there were also reductions in Britain, northern Europe and central EU countries.

However, to reflect good conditions for spring barley crop development, the analyst increased its yield potentials in France and Germany (+750,000 tonnes).

Strategie Grains pointed in its monthly report that weather in the coming weeks would be a key for final harvests.

"Weather conditions in the coming weeks will need to be monitored closely: if the rains forecast for France, Germany and Britain materialise as expected, harvest activities will be greatly slowed and grain quality could suffer," it said.

"In central and southeast Europe, the dry, warm conditions also threaten yield potentials for corn, which has now entered (or will shortly enter) the flowering phase, which is critical in terms of yield formation," it added.