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US officials cut forecast for EU wheat exports, noting Black Sea rivalry

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US officials slashed their expectation for the recovery in European Union wheat exports this season, citing a lowered harvest forecast, citing damage to crops from hot weather and hail.

 

The US Department of Agriculture’s London bureau lowered by 2.0m tonnes, o 25.0m tonnes, its forecast for European Union exports of wheat, including durum, in the season which started last month.

 

Shipments at that level would represent an increase of only 1.0m tonnes year on year, below expectations from other commentators.

 

While forecasts for output can vary between observers - thanks largely to whether they include for example durum wheat, the type used in making pasta - the European Commission forecasts a 4.37m-tonne increase to 26.7m tonnes in soft plus durum wheat.

 

Strategie Grains has previously forecast a rise of some 2m tonnes in EU soft wheat exports, although excludes recent revisions, including a French crop upgrade.

 

The USDA bureau’s report follows a poor start to 2019-20 for EU wheat exports, which for soft wheat fell by 22% to 761,586 tonnes in the first four weeks of the season.

 

‘Unprecedented heatwave’

The USDA bureau said that its reduced estimate reflected in part “an expectation of strong competition from Black Sea origins”, but also a reduced forecast for the EU’s ongoing wheat harvest, which was pegged at 149.5m tonnes.

 

That is 1.80m tonnes below the USDA’s official estimate.

 

The bureau flagged setbacks from “an unprecedented June heatwave”, saying that the “hot, dry weather came at a crucial time for grain fill for spring barley and wheat.

 

“For some countries, this impeded crop development and is forecast to have lowered yield, such as for wheat in Germany, northern France, and Belgium.”

 

‘Damaged crops’

Further east in Romania, by contrast, “rains helped plants recover after late emergence and slow development due to the dry weather in the early spring.

 

“However, summer thunderstorms and hail have damaged crops in some areas,” the bureau said, adding that initial harvest reports “suggest good to very good protein levels, but low test weights with overall wheat quality expected to be similar to 2018-19”.

 

Some crops in Hungary too were reported as suffering hail damage, while in Bulgaria, “the rains in April and May greatly improved the yield prospects but the dry fall has still had a negative impact on the crop.

 

“First harvest reports show above average protein content but lower hectolitre [test weight] numbers.”

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