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.
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
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".
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
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.