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USDA predicts 148m tonne EU wheat crop as quality concerns grow

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The USDA has further reduced its estimates of EU cereals production, as drought affects yields in the Southern member states, especially Spain. But August rains appear to be damaging quality in Germany, France and the UK too.

The hot weather in June across much of the cereal growing area persisted in Spain and Portugal, and has affected yields, but France, which also experienced hot dry conditions, seems to have escaped the same level of yield reduction.

The late July and August rains are now a problem for crops across central and northern Europe. The hot conditions caused them to ripen earlier, while the wet weather is now delaying harvest some with reports of lower breadmaking quality in wheat as measured by the Hagberg falling number test.

EU wheat down 1.3% from July

The USDA forecasts a 148 million tonne EU wheat crop, down from its July figure of 150m tonnes. This is above the 145.5m tonnes from the 2016 harvest, but below the record 160.5m tonnes from 2015. With 2016/17 ending stocks of 10.44m tonnes, this would mean a total availability figure of 165.44m tonnes, 1.9m tonnes down on July's estimate and below the 166.44m tonnes in early August 2016 and 180.06m tonnes in 2015.

Barley output is reduced to 58.7m tonnes, from July's 59.1m tonnes prediction, compared to 2016's 59.8m tonnes and the 62.05m tonnes harvested in 2015. With a slight downwards adjustment of ending stocks, this points to a total supply of 64.78m tonnes (66.2m tonnes at the same point of 2016 and 68.18m tonnes in 2015).

Corn estimate up on 2015 and 2016

The rains are good for the developing corn crop – EU corn production has been eased back to 61.0m tonnes from the 61.6m tonnes forecast in July, but these estimates are higher than the 61.5m tonnes at the same point of 2016 and 58.7m tonnes in 2015. The USDA predicts a total EU corn supply of 84.17m tonnes, higher than the 81.77m tonnes and 82.17m tonnes at the respective same stages of 2016 and 2015

With combining well underway – barley nearing completion in many member states and the wheat harvest in progress, prospects for both yield and quality are mixed ahead of more information, concludes the USDA. It expects a total 2017/18 EU28 grain crop of 300m tonnes, 2.5m tonnes up on the 2016/17 outturn, but 27.5m tonnes down on the record 2014/15 crop.

Euronext milling wheat futures for September delivery stand at euro158.75/tonne, down from its July 11th peak of euro181.75/tonne.

By Jamie Day

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