September 8, 2011

France revises up wheat harvest forecast

After raising its forecast for the domestic soft wheat crop by 500,000 tonnes last month, France's farm ministry added a further one million tonnes on Wednesday (Sep 7), taking its estimate to 33.5 million tonnes.

At that level, the crop - the EU's largest - would still fall short of last year's 2.2 million tonne harvest, but come in way above expectations in the spring, when one of the worst droughts on record saw some observers cut estimates below 30 million tonnes.

The ministry also raised its forecast for the French corn crop by 800,000 tonnes to 14.1 million tonnes, putting a rise in output on the cards.

While sowings are believed to have broadly flat, yield hopes for the crop have been lifted by good summer growing conditions.

Consultancy Arvalis earlier in the week said the yield could set a record, at about 10 tonne per hectare. French yields have in recent seasons come in at some nine tonnes per hectare.

The data come amid a series of upbeat reports from the UK too, where officials on Monday revealed that wheat crop was coming in at a high quality, "which may go some way to compensate for the lower yields" reported following a dry spring there too.

The big question for EU traders are the harvest results in central European areas, notably Germany, and over the levels of damage caused by wet weather now delaying sowings of 2012 crops too.

"North Germany and Poland seeing some scattered showers to the detriment of winter plantings," Jaime Nolan at FCStone's Dublin office said.
 

He added that the cash prices of German wheat were likely to remain relatively high, compared with futures, until more was known of the harvest.

Mixed results in Lithuania and Latvia, where crops have produced good protein levels but fallen short on the Hagberg falling number which is also a key indicator of milling quality, "will also support current basis levels".