Farming's sagging fortunes will prompt a cut in Europe's cereals plantings for a second successive year, driven by a drop in barley sowings, Strategie Grains has said.

European Union farmers will plant 56.97m hectares of cereals for harvesting in 2010, down 1.07m hectares year on year.

Barley plantings will slide by 830,000 hectares to less than 13.1m hectares, with farmers also putting an extra 300,000 hectares of land into set aside.

The forecasts tally with comments from other observers, including the US Department of Agriculture, that European grain sowings were likely to fall.

However, the influential Paris-based analysis group is among the first to put figures to its thinking.

Barley's poor prospects

The Paris-based group said its plantings estimate reflected the "reduction in gross margins at farms across the EU".

Indeed, barley prices looked likely to continue to struggle under an 8.3m-tonne oversupply.

"Unless there are rapid, large-scale offers to intervention, barley prices will remain depressed by the sheer scale of the surplus and the non-competitiveness of EU barley on the world market," Strategie Grains said.

The group was speaking ahead of official data showing farmers had offered more than 850,000 tonnes of the grain.

However, its report saw soft wheat plantings edging 260,000 hectares higher to 22.86m hectares.

Oilseeds sowings would also rise, by 560,000 hectares to 11.8m hectares, led by a jump in plantings of rapeseed, of which Europe harvested a record crop this year.

Export hopes 

Strategie Grains also cut its estimate for Europe's maize harvest this year by 730,000 tonnes, to reflect weaker-than-expected harvests in France, Hungary and Romania.

Production would now come in at 56.21m tonnes, down 10% on 2008 output.

And it raised its hopes for wheat exports by 900,000 tonnes, citing the increased competitiveness of EU shipments following the strong rally in US prices over the last two months.

Nonetheless, at 17.1m tonnes, Strategie Grains' wheat export forecast remains below that of some other observers, including the USDA which earlier this week set a 19m-tonne figure.

* Late on Thursday, official data showed European Union farmers had tendered 852,981 tonnes of barley and 95,834 tonnes of wheat for intervention buying.