eBusiness Weekly
Paris. — The European Union may harvest almost 6 million tonnes less wheat this year after crops in the north of the bloc suffered from a hot, dry spring and amid late signs of crop damage in top EU producer France.
Potential losses in the EU have added to expectations that ample global supplies of the food staple will shrink in 2018/19 as several production regions face adverse weather.
The 28-country EU, collectively the world’s largest wheat grower, should produce 136 million tonnes of soft wheat (common wheat) this year, an average of 10 estimates show. That outlook is 4 percent below a 2017 crop of 141,8 million tonnes, around the volume forecasters were anticipating for 2018 two or three months ago.
“It has been extremely dry since early June and as such crops have suffered, in particular in northern Europe,” Benjamin Bodart, director of consultancy CRM AgriCommodities, said.
Exceptionally warm, dry weather has left grain belts parched around the Baltic Sea, including parts of Germany, the EU’s second biggest wheat grower.
Dwindling harvest prospects in the north have been partly offset by good conditions in Spain, which is set to see production jump by more than half from a drought-hit 2017 crop.
There had been consensus about a decent-sized French crop, near or above last year’s 36,6 million tonnes. But a dramatic cut by Strategie Grains to its French forecast has raised doubts, stirring memories of 2016 when late-spring weather turned a bumper-looking crop into a dire one.
Strategie Grains, which dropped its French wheat crop estimate by 4,6 million tonnes to 33,2 million, says a field tour last week showed signs that heavy rain in winter and then a month ago hurt plant development.
Other observers have lowered their French outlook due to weather effects, but doubt production will fall sharply, noting weekly crop ratings have declined only slightly.
“A lot of rain but will it affect yields and quality?,” Palle Jakobsen, director of consultancy Agrocom.dk, said of France.
EU soft wheat exports could nonetheless rise in 2018/19 to 23,3 million tonnes, according to the poll average, from 21 million in the 2017/18 season that ended on June 30. After a record Russian wheat harvest flooded export markets in 2017/18, lower expectations for its next crop and a lower euro have helped the idea of an EU export rebound.
But some analysts caution that a reduced EU harvest, a continued price advantage for Russia and weather-affected EU crop quality could all curb export demand.
Grain quality determines wheat’s suitability for flour-making and acceptance by importers, but is hard to predict before harvesting, which is in its early stages in the EU.
Internal EU demand, a feature of 2017/18 after poor harvests in countries such as Spain, could also limit exports in 2018/19, especially if wheat makes up for tightening supply of corn for livestock feed.
“We see European feed consumption (of wheat) still at a high level in 2018 /19 and this strong consumption will reduce export availabilities,” Manon Sailley of consultancy ODA said. — Reuters.
