EU farmers to stick by wheat for 2017, even after this year's poor crop

20.10.2016

European Union farmers will stick with similar sowings of soft wheat for the 2017 harvest, despite the bloc's disappointing result this year, Strategie Grains said, cutting again its estimate for the latest crop.

The influential analysis group, in its first forecast for EU soft wheat plantings ahead of next year's harvest, said it expected area to remain stable, forecasting little change either in seedings of winter barley.

While grain seedings in the EU – the world's top wheat producer – will fall a little, by some 300,000 hectares to 56.6m hectares, the decline will be borne by durum wheat and spring barley, Strategie Grains said.

While stopping short of giving detailed area forecasts, it estimated at 6% the decline in durum sowings, from the 2.5m hectares seeded for the latest harvest, while seeing spring barley plantings drop 1.5%.

'Few attractive alternatives'

The forecast is in line with that two weeks ago from the International Grains Council, which said that "faced with few attractive alternatives, EU area is seen broadly unchanged year-on-year".

And it follows a dire harvest for many farmers this year, notably in France, the bloc's top wheat-producing country, where both crop quality and quantity was hurt by persistent rains.

In fact, Strategie Grains cut by a further 600,000 tonnes, to 135.8m tonnes, its estimate for the EU's overall soft wheat production this year - taking the result 15.5m tonnes below last year's record harvest.

The latest downgrade reflected weaker results for countries including France, Poland and the UK, in part offset by upgrade to crops in Germany, Hungary and Spain.

'May become proactive'

The production downgrade was reflected in a weaker forecast for EU exports in 2016-17 too, cut by 360,000 tonnes to 23.4m tonnes – a drop of 28% year on year.

French wheat exports outside the EU were pegged at 4.9m tonnes, a drop of more than 60% year on year.

In fact, EU soft wheat exports so far in 2016-17, at 7.30m tonnes, are running ahead of the 6.2m tonnes shipped in the same period of last season – a situation which, if it continues, could be reflected in higher prices in the bloc, to choke off demand.

Jack Watts, senior cereals and oilseeds analyst at the UK's AHDB told the bureau's conference last week said that "if EU soft wheat exports do start to slow by the turn of the of the year, the market may become proactive to regulate" the pace of shipments.

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