June 15, 2012

 

EU wheat forecast up on good weather

 

 

Forecast for EU's soft wheat harvest this year has been raised by analyst Strategie Grains on Thursday (June 14) after favourable growing weather in the past month.

 

The analyst had slashed its EU wheat crop outlook by 8.5 million tonnes over the previous two months as it factored in damage from frost and dryness, but it now said rain across much of Europe in May had improved crop conditions.

 

Weather had been particularly favourable in Western Europe, where an easing in rainfall in mid-May had also allowed farmers to treat crops to contain disease pressure, it said.

 

"In the light of these good to very good weather conditions, EU soft wheat production is revised up by 1.5 million tonnes this month to 124.2 million tonnes," Strategie Grains said in a monthly report.

 

The change reflected upward revisions for France (+900,000 tonnes), Germany (+500,000 tonnes), Lithuania (+300,000 tonnes) and Bulgaria (+300,000 tonnes), which outweighed a 300,000 tonne cut for both Poland and Romania.

 

The increased forecast for soft wheat, the main crop in the 27-member EU, would still be down 4% on estimated 2011 output of 128.8 million tonnes.

 

Continued favourable weather could raise potential yields in western and northern countries while further rainfall could boost the yield outlook in the Czech Republic, Slovakia, Hungary and Austria, Strategie Grains added.

 

The increased production outlook for soft wheat, coupled with a reduced forecast for animal-feed use, led Strategie Grains to raise slightly its estimate of wheat ending stocks in the EU next season, despite a hike in expected exports.

 

The analyst raised projected EU wheat exports in 2012-13 by two million tonnes to about 13.5 million tonnes on improved price competitiveness against US wheat in Mediterranean destinations from September.

 

The more positive growing conditions since May also led Strategie Grains to raise its estimate of this year's EU barley harvest by 500,000 tonnes to 53.2 million tonnes, now up 3% on last year's crop of 51.6 million tonnes.

 

An 300,000 tonne upward revision in France, together with smaller increases in Germany, the UK, the Baltic countries and Scandinavia, offset a 400,000 tonne cut in Spain due to drought.

 

Corn production was forecast to reach 66 million tonnes, up 400,000 tonnes from last month and now almost equal to 66.2 million tonnes in 2011. The revision mainly reflected a 300,000 tonne increase for Poland linked to more re-sowing of damaged winter crops than previously estimated.

 

Strategie Grains also lifted its outlook for the EU's smaller durum wheat crop by 300,000 tonnes to 7.9 million tonnes, citing reports of good quality from initial harvesting in Spain and southern Italy.

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