EU wheat crop suffers second downgrade in two days

03.07.2017

The European Union wheat crop suffered its second downgrade in two days as the European Commission reduced its forecast below 140m tonnes, following a cut by the International Grains Council too.

The forecast for this year's EU barley harvest suffered a bigger downgrade, with the commission ditching expectations of production staying in line with last year's.

The commission cut its estimate for the EU soft wheat crop the world's biggest, by 2.42m tonnes to 138.86m tonnes.

While still higher than the 134.36m tonnes produced last year, when summer rains wrought heavy damage to France's crop, the commission's revised forecast was lower than that from many other commentators.

 IGC, Strategie Grains downgrades

Indeed, the International Grains Council late on Thursday cut its forecast for the EU soft wheat harvest by 400,000 tonnes to 140.8m tonnes.

Earlier this month, market analyst Strategie Grains cut its EU wheat estimate by 1.1m tonnes to 141.6m tonnes, in line with a loss of yield potential in France, Germany and Spain.

Strategie Grains has since downgraded the French wheat crop by a further 1.6m tonnes to 35.6m tonnes, after the spell of hot dry weather in the third week of June.

'Limited soil moisture'

The commission's downgrade reflected a cut of 0.1 tonnes per hectare to 5.8 tonnes per hectare in the forecast EU soft wheat yield.

The International Grains Council also lowered its yield expectations, saying that while late-May rains had "helped to stabilise" prospects for French, German and UK crops, "concerns about limited soil moisture in parts of western Europe returned following hotter-than-normal temperatures" in June.

"Mostly dry conditions also persisted in northern Spain and Italy."

However, prospects in the main central and eastern producing countries, including Poland, are "broadly satisfactory".

'Disappointing results'

The commission downgraded its forecast for this year's EU barley harvest by 2.47m tonnes to 57.0m tonnes, taking the estimate further below the 2016 figure of 59.6m tonnes.

The revision also reflected a cut of 0.1 tonnes per hectare in the yield forecast, to 4.7 tonnes per hectare.

The IGC in its monthly report made a smaller downgrade to its EU barley crop forecast, of 1.2m tonnes to 58.8m tonnes.

The council cited damage to the crop from "spells of adverse weather", and noted "disappointing results" to Spain's harvest, "due to drought".

"Combining started early in France, but because of dryness and earlier frosts, yields are seen slightly lower than average."


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