June 10, 2011

 

US officials ditch hopes for rise in EU wheat crop

 

 

US officials in Europe have, citing drought, slashed their estimates for Europe's grain harvest, ditching expectations of a rise in wheat output and cutting expectations barley to the lowest this century.

 

The USDA's EU bureau had cut five million tonnes from their forecast for the French wheat crop, the region's biggest, and two million tonnes from their estimate for the German crop, the second largest.

 

Barley expectations were cut by one million tonnes apiece. "France, Germany, and the UK have all experienced some of the driest conditions on record in March, April, and May," the attaches said.

 

"Not only has this dried soils but it has also limited the efficiency of fertiliser applications," leaving granules sitting on the surface rather than dissolving into the soil.

 

However, the bureau also highlighted "excellent growing conditions" in many states, such as Hungary, Romania, and Spain, which have enjoyed ample rains, and downplaying the risk to the UK crop from drought.

 

"With only 10% of the UK grain crop planted on light soils, while the dry conditions are of some concern, the crop is showing some resilience, although both yield and quality are expected to be below average."

 

The fresh estimate of 133.5 million tonnes for the EU wheat harvest, while 5.1 million tonnes below the USDA's current official figure, is higher than that of some other analysts.

 

Analysts at Australia & New Zealand Bank said they were looking for the USDA, when it unveils on June 9 fresh estimates for a range of crops in its monthly Wasde report, to cut their estimate towards 130 million tonnes. Some estimates have come in at below 130 million tonnes.

 

And while revised forecasts for the EU barley crop, at 52.5 million tonnes, would be the smallest harvest since the region expanded to encompass 27 nations at the start of the millennium, it is a modest 1.4 million tonnes below the current USDA figure.

 

The total grains harvest was pegged at 277 million tonnes, down by more than six million tonnes on the current USDA estimate, but still implying an increase from last year's harvest of 275.4 million tonnes.

 

However, the attaches added that "should the dry conditions continue in the affected countries then yields will likely be further reduced and not just for wheat and barley but also for other grains, notably corn in France".

 

The report estimated Europe's wheat inventories ending 2011-12 at just under 12 million tonnes, a rise of 500,000 tonnes year on year, but still tight by historical levels.

 

Barley stocks were pegged at an eight-year low of 5.2 million tonnes.

 

Echegaray alleged that Cargill had also used Uruguay and Swiss subsidiaries to evade taxes in Argentina. Cargill, ADM and Dreyfus were suspended from the exporters' register by the government earlier this year as a result of the investigation.