September 16, 2013


EU corn production expected to be higher than 2012 despite lower harvest


Despite blunted yields in key growing zones like France, Germany and central Europe due to the summer weather, EU corn production is expected to surpass the drought-hit harvest of 2012.


As crops in some growing belts show the effects of dry weather, the prospects for this year's corn harvest in the EU continue to decline, analysts said.


French-based analyst, Strategie Grains, lowered its forecast for EU grain corn harvest by 1.7 million tonnes, at 64.0 million tonnes, cutting its corn outlook for the fifth straight month. This comes after sharp cuts to corn production and yield estimates by the EU's executive at the end of August.


"The generally dry conditions throughout the summer in these countries have caused water stress for the plants, and decreased yield potentials," Strategie Grains said.


Due to prolonged spells of heat and dryness, Hungary has borne the brunt of yield losses. Crops in top EU producer, France, are also causing concern as summer stress came after difficult sowing conditions.


Strategie Grains cut its estimate of the French crop by 360,000 tonnes to 15.6 million as it trimmed yields, bringing it in line with the farm ministry's outlook. However, cash brokers warned that the crop may drop below last year's 15 million tonnes.


One broker said that late sowing, heavy rain and the intense heat during the summer have taken their toll.


Non-irrigated corn fields, which account more than half of the area sown in France, are expected to have suffered most from the hot, dry conditions this summer.


Even as the crops are developing later than last year, harvesting will soon start in France. The summer weather allows catch up on some of the growth delays caused by late sowing.


After tough sowing conditions reduce planting area and curbed yields in Italy, the third-biggest EU corn producer after France and Romania, output may scarcely surpass last year's harvest.


"Production is expected to be only slightly higher than in the last season at just over eight million tonnes," said Mario Salvi, an analyst at farmers' association Confagricoltura.


He said that the sowing area was about 8%-10% smaller than last year. A cold and wet spring in most of the northern region has caused farmers to plant late and this has partially affected yields.


Crop quality, however, is expected to be better this year, Salvi added. Harvesting in Italy has started in some areas and has yet to begin in others, with field work in the north delayed by up to 20 days, he said. The situation was more promising in Spain, where corn is irrigated and crops mostly escaped intense heat.


The harvest was expected between four million and 4.5 million tonnes of corn, in line with last year's crop of 4.4 million tonnes, according to farmers' groups and traders.


The Spanish farming ministry's data showed that the area planted for corn this year is nearly 10% higher than last year at 424,500 hectares.


Romania is another bright spot for the EU corn harvest, where crops were spared severe summer conditions. Production could rebound from the drought of 2012.


Strategie Grains estimates the new crop at 10 million tonnes, up from 5.6 million in 2012.

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