December 17, 2010

Strategie Grains sees 2011/12 EU grain output up by 6%

In its first production estimate for the coming season, Strategie Grains stated Thursday (Dec 16) that EU's grain production is projected to rise 6% next season to 291 million tonnes.

The 17-million-tonne increase is based on a forecast 2% rise in grain plantings in the 27-nation bloc in 2011 and an improvement in yield "after the upsets of 2010," the analyst said.

EU grain production suffered this season after poor weather hurt crops in many key producers. In October Strategie Grains said it expects grain plantings to rise next season as farmers look to cash in on higher prices at the expense of oilseeds.

The grain analyst forecast soft wheat production will rise 7% on-year to 137 million tonnes, including a two-million-tonne increase in both German and French output and one million tonnes more from the UK. Bloc-wide soft wheat plantings are expected to rise 2% next year to 23.4 million hectares, it said.

Milling wheat for delivery in November 2011, the first expiration date after next year's crop, has climbed 56% since the contract started trading on NYSE Liffe in Paris, increasing farmers' incentive to sow the grain.

Barley production is also expected to increase by three million tonnes to 56 million tonnes due to a 3% larger planted area. Corn output is forecasted at 58 million tonnes, with one million tonnes of the three-million-tonne rise expected to come from Hungary.

The estimate paints a more optimistic picture than the International Grains Council, which predicts EU plantings will rise only 1% in 2011, and figures from the farmer's lobby Copa-Cogeca predicting a 1.1% increase.

Strategie Grain's production forecasts are based on yields projections using data from the past 20 years. "They are susceptible to be modified significantly in the coming weeks and months," the analyst said.