UK rains prompt downgrade to EU wheat hopes

The excessive rains in the UK which may be poised to ease - prompted Strategie Grains to cut again its forecast for the European Union wheat harvest, the world's biggest.

The influential analysis group lowered by 1.1m tonnes to 132.2m tonnes is estimate of the EU soft wheat harvest this year.

Strategie Grains, which had initially pegged the harvest at 136m tonnes, said the that downgrade reflected a cut of 1.4m tonnes to its outlooks for combined production in France, the EU's top producer, and the UK, the third biggest.

"In the UK, the continual rains have further limited winter wheat plantings," the Paris-based group said, attributing also the downgrade to the French to a lower forecast for sowings.

'Redrill failing crops'

The downgrade to French area contrasts with a small upgrade on Monday, of 20,000 hectares to 4.98m hectares, in the French farm ministry's estimate for winter wheat plantings for the 2013 harvest, a figure representing a 3.1% rise on last season.

However, the ministry acknowledged that the plantings, "some of which were carried out late, were in several regions penalised by excessive rain," a factor which "could lead to some fields being resown at the end of the winter".

In the UK, some drier weather this month has prompted some growers to attempt to complete sowings winter wheat which would normally have been finished by November, but were held up by the tail end of one of the wettest years on record.

Traders at a major European commodities house noted that "stories abound of plans to drill missed crops and redrill failing crops.

"But at this stage it is unclear to what extent this may or may not happen, and the impact it could have on the size of the coming harvest."

'Allow dryness to develop'

However, weather service MDA on Wednesday forecast drier UK weather in March and April potentially enough to present worries over a lack of moisture.

"Continued below-normal rainfall in UK would allow some dryness to develop, stressing wheat and rapeseed growth," the US-based group said.

Indeed, the group forecast "below-normal precipitation across much of Europe during March", which "would ease wetness concerns in southern Germany, but may lead to some areas of dryness elsewhere".

Barley upgrade

Strategie Grains added that concerns over the potential for frost damage, over which it had previously cautioned, had failed to materialise, thanks to benign temperatures, although snowmelt in Germany could yet leave crops vulnerable to a late freeze.

The group was more positive on many other crops than wheat, lifting its forecast for barley by 400,000 tonnes to 55.1m tonnes, and for maize by 600,000 tonnes to 65.5m tonnes.

The EU's overall grains harvest was pegged at  292.7m tonnes, level with last month's forecast, and a rise of 5.7% year on year.

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