Strat Grains underlines fears for EU wheat quality

Strategie Grains cautioned over the quality of the European Union wheat harvest, even as it nudged higher its estimate for the quantity, with increased yield expectations for many northern countries.

The influential analysis group lifted by 1.1m tonnes to 140.5m tonnes its forecast for the EU soft wheat harvest, the world's biggest taking to 5.0m tonnes the estimate the increase in production over last year's result.

The upgrade reflected increased yield hopes for countries including France, the bloc's top producer, and second-ranked Germany, besides Denmark and Sweden and, in the east, Hungary and Romania.

However, Strategie Grains also flagged the threat to quality from heavy rains earlier this month, saying that milling wheat production would fall despite the rise in the overall harvest.

While rainfall during the growing period is, generally, positive for crops, moisture encourages sprouting in ripe grain, reducing milling quality and potentially leaving crops fit only for feed.

'Uncertainty hangs over quality'

In fact, in Spain, where drought rather than excessive rain has been farmers' problem, quality appears good, on a crop with low yields.

In Hungary and Romania, quality appears satisfactory, if below year-ago levels.

However, prospects appear poor for the quality of soft wheat in Crotia, Greece and Italy, and "uncertainty hangs over grain quality in all the other soft wheat producer countries - in particular France, Germany, Poland and Britain - due to the rains of the last few days", Strategie Grains said.

The Paris-based group estimated at 94m tonnes EU production of milling wheat, down 3m tonnes year on year and equivalent to 67% of the crop, compared with 71% in 2013.

And it cautioned over the potential for a further cut in milling grain.

"If the rains persist for longer than a few days without any dry spells, grains quality and even yields could deteriorate significantly."

'Degradation in quality'

The quality caution tallies with comments from other observers, with consultancy Agritel noting that "several production zones report degradation in quality due to an early germination.

"Once the harvest proceeds, the scale of this issue can be quantified, as well as its actual impact on production," Agritel added.

Early results from the harvest of durum wheat, the type used in making pasta, have already indicated disappointing yields thanks to weather setbacks in Italy, which produces around half the EU crop, with some reports of high disease pressures too.

Strategie Grains cut by 400,000 tonnes to 7.2m tonnes its forecast for EU durum production this year, a drop of 10% on last year's result.

That limited to 700,000 tonnes its upgrade for the overall EU wheat crop, taking its estimate to 147.7m tonnes.

The US Department of Agriculture on Friday raised its forecast for the EU wheat harvest by 1.63m tonnes to 147.88m tonnes.

Corn prospects

However, the EU rains have proved more timely for corn, which is spring sown and still in its growth phase.

Strategie Grains raised its forecast for the EU corn harvest by 500,000 tonnes to 66.4m tonnes.

That represents an increase of 2.1m tonnes year on year, and is more upbeat than the 65.64m tonnes at which the USDA has forecast 2014 production.

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