Weaker euro spurs EU grain export growth

EU grain exports are experiencing a healthy growth as the euro weakens against the US dollar.

The EU is expected to export 20.1 million tonnes in the 2008-09 crop year, up from 18.1 million tonnes in the previous year, according to Paris-based Stategie Grains. The EU has exported 160,000 tonnes of feed wheat to the US, and France has sold 60,000 tonnes of wheat to Egypt.

The agency also forecast that total EU wheat area for the 2009 harvest will be 22.64 million hectares, down 2.5 percent on-year.

Poor growing conditions are also expected to pull average yields down to 5.77 tonnes per hectare, compared to 6.04 tonnes per hectare in 2008. Therefore, total EU wheat production is forecast to reach 130.62 million tonnes from 140 million tonnes in 2008.

Rainfall in France during March was as much as 50-percent below average and many crops are reportedly showing signs of stress.

Rainfall in Germany was 32-percent above average in March, while Denmark saw an extra 15 percent. Spain's rainfall was close to average but farmers are reported to have used less fertiliser.

The UK exported 255,000 tonnes of grains in February, thanks to the weakness of the sterling, according to the Home Grown Cereals Authority. The UK has exported 2.6 million tonnes of grains compared to 1.08 million tonnes last year. But the UK is expected to export more than 300,000 tonnes each month if it wants to clear its cumulative surplus of 3.9 million tonnes.

Wheat for November on the London futures market remains unchanged at GBP118 (US$152.5) per tonne.