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Estimates for EU wheat show third-biggest harvest

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Early estimates for the European Union wheat harvest, the world's biggest, are building a consensus around an expectation of the third biggest output ever, lifted by a rise in sowings at the expense of barley.

The European Commission, in its first estimates for the bloc's wheat crop this year, pegged it at 144.5m tonnes, including 8.67m tonnes of durum, the type used in making pasta.

The figure, up from 143.9m tonnes last year on commission estimates, was in line with the 145.1m tonnes forecast by Strategie Grains, and the 143.0m tonnes expected by the International Grains Council.

And it would be the best result since the record 152m-tonne crop achieved six years ago, a result which sent stocks soaring 50% and contributed to a decline in Paris wheat futures to E122.25 a tonne in December 2008.

Dairy demand

However, the commission forecast a more modest rise in EU wheat inventories over 2014-15, by 2.4m tonnes to 11.8m tonnes, a figure which remains low by historical standards.

Although exports will fall by some 3.7m tonnes they will - at 23.3m tonnes including durum - prove strong by historical standards, beating the 10-year average of 17.7m tonnes.

And wheat consumption by livestock producers will rise by nearly 5m tonnes, in part thanks to some displacement of barley and corn use, but also thanks to a growing needs, encouraged by the quest by dairy producers to exploit elevated milk prices.

"The number of dairy cows in the EU is growing," the commission said, noting that high milk prices had triggered "rise in heifer retention and a decline in cow culling".

'Good crop emergence'

The commission said that its forecast for EU wheat production factored in mild and humid conditions which had "allowed good crop emergence and establishment.

"No extreme frost event was recorded except in Slovenia."

However, it cautioned that the risk of frost damage to crops remained, given that even in areas with a protective snow blanket, cover was "currently thin".

Some western parts of the bloc, such as Ireland and the UK, had also received "excessive" rains which may prompt some replanting, or have shifted farmers to spring-sown crops.

By Agrimoney.com

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