October 31, 2011

EU's huge corn crop hints on higher export

Corn gathering in the EU's major producing regions is mostly done, signalling a huge harvest that should allow higher EU exports this season.

Corn has been boosted by favourable growing conditions this year as well as an increased planted area in several countries, even if summer heat in parts of the eastern part of the EU is thought to have limited yields there.

Strategie Grains this month raised its estimate of the 27-member EU's corn crop by 1.7 million tonnes to 63.4 million, up 15% versus 2010 production, while fellow analysts Offre & Demande Agricole (ODA) increased their forecast by 1.2 million to 62.8 million tonnes.

In top EU corn producer France, harvesting was winding down and strong results led growers group AGPM to estimate a record average yield of 10.4-10.5 tonnes a hectare, with output seen rising to near 16 million tonnes.

ODA, which this month raised its outlook for the French crop by 300,000 tonnes to 15.5 million, said summer rain had favoured plant growth and limited the impact of a spring drought.

"The estimate confirms the very good yields," ODA's Alexandre Marie said. "The record yields have come especially from non-irrigated fields thanks to the summer rain."

Final French production could be boosted further by transfers of area from corn fodder to corn grain, as livestock farmers find themselves less in need of extra fodder than in the wake of the severe drought last spring.

"It's now clear that we will be above 16 million tonnes," said Jean-Paul Renoux of grains institute Arvalis, referring to transfers from corn fodder currently put at 50,000 hectares.

The arrival of a large corn crop in France and elsewhere in the EU has fuelled exports at a time when prices in the United States, the world's top corn exporter, are relatively high.

EU corn export licences outpaced the volume for wheat this week, and put total corn exports so far this season just ahead of imports, an unusual situation in the EU which is structurally dependent on corn imports.