July 30, 2012

Europe's corn crops grow healthy on warm weather's return

After a hot spell which could cut yields in Italy, corn crops in Western Europe are mostly developing well, with the return of warm, sunny weather this week helping crops in France and Germany.

Western European corn is in better shape than crops in the US, where the Midwest is enduring its worst drought in decades, and in Eastern Europe, where crops in EU members Bulgaria, Hungary and Romania, and further east in Ukraine have been stressed by hot, dry conditions.

The arrival of summer weather this week in grain belts in France and Germany, the EU's top grain producers, has provided a welcome boost for corn crops after recent damp conditions.

"Sowings were difficult due to the rain and there were delays in some places, but the weather has improved since and even if they will be mixed, crops in France should be good," Cedric Poeydomenge, deputy director of French corn growers group AGPM, said.

France recorded record corn output last year, helped by early planting and summer rain that came in time to limit the effects of a spring drought that hurt winter grains.

"It may not reach the records seen last year but we will be above or at minimum around the average of the past three to four last years," he said of this year's crop.

France recorded a record average yield of 10 tonnes a hectare in 2011, with the total crop put at 15.7 million tonnes by the farm ministry.

Poeydomenge is currently expecting an average yield of 9.7-9.8 tonnes per hectare but he made clear it was still too early to call a precise estimate of the harvest, due to take place in the autumn.

Rain is forecast to return in France this weekend and next week, raising concerns about damage to the ongoing wheat harvest, but Poeydomenge said the alternation of rain and hot, sunny weather was positive for corn.

In contrast, the situation in Italy, another major corn grower in Europe, had deteriorated after a prolonged hot and dry spell, with yield losses now expected. According to preliminary estimates of Italy's biggest farmers body Coldiretti, some 100,000 hectares of corn plantings, or about 10% of the total corn area, appear to be damaged by dryness. The weather problems in Italy and in the eastern EU and have led forecasters to scale back their outlook for this year's EU grain corn harvest.

The EU crop monitoring unit MARS slashed its EU-wide corn yield estimate to 6.73 tonnes a hectare from 7.38 tonnes last month, including a cut in its yield forecast for Italy to 8.86 tonnes from 9.46 tonnes previously.

The high temperatures and the lack of precipitation during the last weeks had a negative impact on flowering and on the leaf area expansion, which is significantly below the average, and the situation could get even worse if key producing regions of Emilia Romagna and Veneto had irrigation problems, MARS said.

In Germany, corn is generally developing well, as in France, but more sunshine was needed following the exceptionally cool and wet start to the summer, the head of the German corn producers association DMK said.

"We are expecting an average to good corn harvest in Germany this year," association head Helmut Messner said. "A questionnaire among growers, crop consultants and trading houses in late July showed a generally satisfactory situation."

Germany has had repeated rain in past weeks, stopping the barley harvest and creating concern about quality damage to wheat, but corn has more time to recover. Sunshine reappeared on Monday (July 23) and dry, sunnier weather is forecast to continue up to Friday (July 27), but rain is again forecast for the weekend.

Germany's leading grain trading house Toepfer International on Friday (July 27) forecast the 2012 grain corn crop will be little changed at 5.23 million tonnes from 5.22 million tonnes in 2011.

The corn harvest in Spain is expected to be the best for the last three years in 2012, according to Spain's Farm Cooperatives Association, as the irrigation spared the crop from the effects of drought that hit harvests of other cereals.

The harvest is expected to be around 3.8 million tonnes, and comes after 6.4% of extra farmland was dedicated to corn this year. Despite the improved harvest this year Spain will need to import another four million tonnes of corn to meet its needs.

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