August 23, 2011

 

Germany's unfavourable weather to affect wheat crop

 

 

Although some areas of Germany have attained an acceptable harvest, rain is bringing up concerns about damage to the quality of this year's wheat crop, according to traders and analysts on Monday (Aug 22).

 

Repeated rainfall for weeks has been disrupting Germany's wheat harvest, which would normally be approaching completion by now.

 

"The Federal Agriculture Ministry expects grain and rapeseed yields to be significantly lower than the multi-year average," the ministry said.

 

It is too early to make detailed forecasts about the size of most grain crops as late rain is making harvesting difficult, the ministry said.

 

Germany's wheat harvest has suffered a fall in yields because of late rain but these were not as serious as had been expected during the springtime drought, it added.

 

The ministry reminded farmers that several financial support programmes exist to provide support in poor crop years.

 

Some traders estimate that up to 60% of the crop in north and north-east Germany, major producers for export, has still not been brought in. But progress has been better in south and central Germany, where wheat quality is generally satisfactory, they said.

 

"I estimate about 80% of the wheat crop has been gathered nationally, but there is now serious worry about quality loss to the 20% remaining in the fields, largely in north Germany," one analyst said. "A lot more of German wheat crop will be feed quality."

 

Germany's wheat crop is likely to shrink by 7.5% on year to 22 million tonnes, the German Farm Cooperatives Association forecasts. This is down from the 22.82 million tonne forecast by the association in July.

 

"It is not a disastrous crop nationally because the harvest in the south and centre of the country is reasonable, but the remaining areas to be bought in will have suffered significant quality damage," a dealer said. "The precise picture is still unclear, but late quality loss is now generally expected."

 

The main problems are in the northern regions of Schleswig-Holstein and Lower Saxony plus Mecklenburg-Vorpommern in the north-east.

 

French analyst Strategie Grains on August 11 estimated that 82% of this year's German wheat crop would be milling wheat quality, down from its previous estimate of 93%. Germany's crop last year also suffered from late summer rain and only 43% of the 2010 harvest was bread quality.

 

"I think we are going to see a milling wheat proportion this year much less than Strategie Grains estimates," another trader said. "This will reduce German export supplies, but we will not need imports."

 

A mixture of sunshine and rain prevented major harvest progress in north Germany over the weekend. The outlook is not good, with a mixture of showers and sunshine forecast for north Germany up to Friday (Aug 26).

 

Harvesting started to gather speed again on Monday (Aug 22), but fields were still too soft for harvesters to drive on, traders added.

 

Progress in the final stages of the harvest will largely depend on how heavy the showers this week turn out to be.

 

"Concern is now growing that at the end of this week the wheat remaining in the fields is only likely to be feed quality," a trader added.

 

North German feed wheat prices are now around EUR20 (US$28.75) a tonne below milling wheat prices, as compared to EUR8-10 (US$11.50-14.38) in early August, showing market expectations of more feed wheat this summer.

 

The wheat harvest is also so delayed by now that traders are also starting to become concerned that rapeseed sowing for the 2012 crop will not be completed. Not only are farmers still occupied by the harvest but some of their lands are normally rotated between wheat and rapeseed.

 

"If we do not finish quickly, we could see problems with the sowing of rapeseed, which has a comparatively small time window," a trader added.