July 2, 2008


EU expects 15-percent rise in grain harvest


EU farmers are expecting a 15-percent rise in their grain harvest with the latest crop reaching as high as 294 million tonnes compared to last year's 255 million tonnes.


Wheat production is expected to rise 17 percent to 130 million tonnes while corn output could rise by 25 percent to 59 million tonnes.


Barley could jump by more than five million tonnes to 61 million tonnes, a 9-percent increase.


However, other factors belie the optimistic forecasts:


In Italy, about 30 per cent of the wheat has already been harvested, but quality is no more than average. In Spain, heavy rain has delayed the progress of combines by at least two weeks. UK wheat crops generally look promising, but much will depend on the July weather. Parts of England have reported a distinct lack of rainfall, but high humidity levels are encouraging foliar diseases, necessitating additional crop spraying.


Meanwhile corn is expected to be in short supply in international markets.


The International Grains Council has revised corn output by seven million tonnes to 756 million tonnes while consumption is predicted to reach a record 782 million tonnes, meaning a 26-million-tonne shortfall. 


This also means corn ending stocks this year, expected at 97 million tonnes, could be the lowest in 25 years. The shortfall has driven CBOT corn prices to new highs.

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