August 13, 2010

 

Strategie Grains trims EU wheat forecast

 

 

French-based analyst Strategie Grains has reduced its estimate for this year's EU soft wheat crop for the second straight month, citing the impact of persistent rain in the southeast of the bloc.

 

The French analyst now sees EU's soft wheat production at 128.2 million tonnes, 1.3 million less than forecast last month and down 1% on the 2009 crop.

 

In a monthly report, it reduced forecast output for Bulgaria, Hungary and Romania by 1.4 million tonnes in view of heavy rain and also cut expected production in Finland, Sweden and Poland by 440,000 tonnes as hot, dry weather in July curbed yield potential.

 

These cuts were partly offset by upward revisions in France and Spain due to raised area estimates, as well as in Denmark and the Baltic countries where yields were raised, it said.

 

The analyst had slashed its EU wheat forecast by 3.6 million tonnes in its July report to reflect the impact of a heat wave in some western EU countries and excessive rain in the east of the bloc.

 

Adverse weather this summer fuelled a price rally in European wheat that accelerated to highs this month amid a drought emergency and export freeze in Russia.

 

About 60% of the wheat area in the EU had been harvested as of August 6, with work continuing in northern countries, Strategie Grains said.

 

The quality of this year's wheat crop would be varied, the analyst said.

 

"Soft wheat grain quality across the EU will be very varied this year, with sharp deteriorations in the east due to heavy rains but good results in France," it said.

 

The analyst also reduced its forecast for this year's corn crop in the EU, putting it at 57 million tonnes, down 1.1 million tonnes from last month and now unchanged versus 2009.

 

Expected output in Germany, France and Italy was cut by 1.3 million tonnes as hot, dry weather hurt yield potential during the flowering phase, outweighing a 530,000-tonne hike in Bulgaria and Romania where rain was beneficial for plant growth.

 

In total, Strategie Grains expected the EU to produce 277.5 million tonnes of grains in 2010, down 3.5 million tonnes from last month's forecast and now down 5% on 2009.