France issues downbeat wheat harvest forecast

French farm officials diverged with other commentators by forecasting a drop in the country's wheat production this year, adding to ideas that the European Union harvest may not quite live up to earlier bumper expectations.

The French wheat crop, the EU's biggest, will come in at 37.9m tonnes, the country's farm ministry said, estimating the soft wheat harvest at 36.5m tonnes with a further 1.4m tonnes of durum, the type used in making pasta.

The forecast represents a fall of 800,000 tonnes year on year, on the ministry's own estimates, contrasting with more buoyant expectations from other analysts.

The US Department of Agriculture sees France's all-year production at 38.5m tonnes, while the International Grains Council puts it at 38.8m tonnes.

Brussels-based industry group Coceral forecasts a crop of just over 39m tonnes.

'Quality might decline'

The estimate comes amid ideas that estimates for the EU wheat harvest may have passed the high water mark, with late rains viewed as at least damaging quality, and potentially to some yield losses.

Estimates for French wheat harvest, (soft wheat element)

Copa-Cogeca: 39.939m tonnes, (38.368m tonnes)

Coceral: 39.065m tonnes, (37.665m tonnes)

IGC: 38.8m tonnes

USDA: 38.5m tonnes

French farm ministry: 37.9m tonnes, (36.5m tonnes)

Concerns have been greatest in south east Europe, where INTL FCStone warned last week that heavy rains were threatening the harvest, and Agritel this week cautioned that "abundant rain might harm" crops.

However, rain has also interrupted the French harvest, with Agritel warning that, while initial results from the harvest of winter barley, among the first crops to be reaped, had proved satisfactory, "quality might decline this week due to recent rainfall.

"Producers of durum wheat once more face quality concerns that might lead to large differences in price depending on the quality."

'Needs to be monitored'

FCStone cautioned that rains of up to 3.5cm in France on Monday, and over the weekend, "will not have done anything to benefit harvest progress", adding that further precipitation is expected over the next two days, particularly in eastern areas, with amounts of up to 3cm expected.

"Heavy rains in France would serve to delay harvest and could raise questions around wheat quality," the broker said.

While the conditions were "not a major concern" currently, they represented "a situation that needs to be monitored".

The broker added that further rains are also expected in eastern Europe over Bulgaria, Hungary and Romania.

MDA forecast that "rains will favour most areas through Saturday, with the exception of Spain", where drought has spurred ideas of increased grain imports.

Rains "should end dryness concerns" in some central European areas, but "will slow wheat drydown and harvesting", the weather service said.

Barley, rapeseed prospects

The French farm ministry was more upbeat on estimates for the French barley harvest, estimating it at 11.3m tonnes, up 1.0m tonnes year on year.

This forecast - comprising 8.2m tonnes of winter barley and 3.1m tonnes of spring crop -is more upbeat than expectations from the likes of the USDA, at 10.9m tonnes, the IGC, at 10.8m tonnes, and Coceral, at 11.0m tonnes.

The ministry pegged the French rapeseed crop at 5.2m tonnes, in line with expectations from other forecasters.

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