PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 12:03 UK, 17th Apr 2014, by Agrimoney.com
Hopes ease for EU wheat crop, but rise for exports

Strategie Grains cut its estimate for the European Union wheat harvest this year, but raised its forecast for exports, citing reluctance among buyers to purchase from crisis-hit Ukraine.

The influential analysis group reduced by 500,000 tonnes to 137.2m tonnes its forecast for the EU soft wheat harvest, the world's biggest, reducing to 1.6% (2.1m tonnes) the improvement on last year's crop.

This rate of increase is half the pace of the rise in sowings, even after the estimate for area was trimmed by roughly 100,000 hectares to 24.0m hectares, reflecting ideas the barley had proved more popular than thought in winter sowings in some areas.

The group raised by 500,000 tonnes to 55.9m tonnes its forecast for the EU barley harvest.

Weather concerns

The group attributed its downgrade to wheat production also to cold weather in the Baltic countries and in Finland, although other commentators are raising some concerns too over a dearth of rainfall in some European countries.

Toepfer, the Hamburg-based grain trader, on Wednesday pegged the German wheat harvest the EU's second largest - at 2.95m tonnes, down 920,000 tonnes year on year, albeit still a good result, citing the threat from dry weather, particularly in western and southern areas.

And weather service MDA flagged that "dryness continues to build across north central Europe", including parts of France, Hungary, Italy and Spain as well as Germany.

While some of these areas will receive rains next week, "dryness will continue in western Germany and north eastern France", much of which has received 20%, or less, of normal rainfall over the last six weeks.

Consultancy Agritel said that "rains expected tomorrow in Europe should be weak", and prove unable to "change that much the situation".

Export upgrades

Strategie Grains raised its estimate for EU soft wheat exports in 2014-15, by 500,000 tonnes to 22.9m tonnes, despite the lower production, highlighting the potential for buyers to pull back on purchases from crisis-hit Ukraine, where three pro-Russian separatists were killed overnight in a raid on a military base.

The revision took to 2.4m tonnes the group's upgrades in three months to estimates for EU soft wheat shipments next season, and would represent a record high were it not for the even stronger result expected for 2013-14.

Indeed, the estimate for 2013-14 soft wheat exports was lifted by a further 1.2m tonnes to 26.8m tonnes, reflecting a surprisingly strong pace of late-season shipments.

"French wheat is facing tough competition from Russian wheat, but is still being purchased by Algeria," the Paris-based group said.

Official data on Wednesday showed EU export licences this week granted for shipments of 421,000 tonnes of soft wheat, taking the total since the start of the season, in July, to 24.285m tonnes.

The EU has sold 859,000 tonnes of flour and 756,000 tonnes of durum wheat on top, taking total shipments to 25.9m tonnes thus far.

The US Department of Agriculture sees the EU's all-wheat shipments at 29.0m tonnes this season.

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