July 24, 2012


EU grain output expectation reduced by dry weather


European grain harvests have been affected by continued arid weather in southern and south east Europe, which is expected to last until the end of July, the European Commission's crop monitoring unit said on Monday (July 24).


"Europe will remain divided between the North, characterised by low temperatures and relatively wet conditions, and the South, where scalding temperatures will strike the Iberian Peninsula and the Black Sea Area," the unit, called MARS, said in its monthly yields update.


Spain, Italy, Hungary, Romania and Bulgaria as well as Ukraine have been hit hardest so far, it said.


Grain prices in Europe markets have surged to record highs in the past couple of months, spurred by a drought-fuelled rally on the US markets and by weather concerns at home.


Among cereals, EU corn has been hit hardest by hot and dry weather in major producing countries such as Romania, Hungary and Italy.


MARS cut its forecast for EU 2012 corn yields to 6.73 tonnes per hectare (t/ha) from an estimate of 7.38 t/ha last month, down 11.7% on 2011.


It cut its forecast for EU 2012 soft wheat yields to 5.57 t/ha from 5.60 t/ha last month and down 0.3% on 2011, it said.


It also cut its forecast for the EU 2012 barley (winter and spring) yield to 4.31 t/ha from 4.41 t/ha last month, but that is still 0.1% higher than in 2011.


MARS raised its view on 2012 rape and turnip rape yields to 2.91 t/ha from a previous forecast of 2.87 t/ha, or 1.9% higher than 2011.


In France, Europe's agricultural powerhouse, harvesting of winter cereals is currently on-going without constraint in the south where durum wheat is almost completely harvested.


In the central and northern regions, abundant rainfalls registered during summer have benefited soft wheat and winter barley, creating "quite positive expectations" for the harvest.


Spring barley is at the end of the grain filling stage and crop indicators suggest a high yield potential.


The favourable weather permitted an adequate development of summer crops as well. Grain corn is currently flowering in most regions, and indicators reveal that leaf area development is substantially higher than seasonal values.