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Weak prices, poor weather leave EU on course for 2018 wheat area drop

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Strategie Grains ditched ideas of a rise in European Union soft wheat sowings for the 2018 harvest, foreseeing them on course for a fourth successive year of decline, undermined by weak prices and wet weather.

 

The influential analysis group lowered by 300,000 hectares, to 23.5m hectares, its forecast for soft wheat sowings in the EU, the top producer of the grain.

 

The downgrade took the figure below the 23.7m hectares seeded last year, and further below a recent high of 24.4m hectares, set ahead of the 2014 harvest.

 

The weakened forecast reflected in part weak prices - with Paris’s December futures contract on Wednesday touching E158.75 a tonne, its lowest level since August – besides a wet weather which slowed fieldwork in some parts of central Europe.

 

‘Bad conditions’

 

“The 2018 harvest has been negatively affected by current low wheat prices and bad conditions at planting time in northern Europe,” the Paris-based group said.

 

Besides highlighting weather setbacks in Scandinavia and the Baltic States, Strategie Grains also said that “conditions did not improve in Germany and Poland, where farmers were unable to fulfil their original sowing intentions”.

 

The comment follows an estimate earlier this week by UFOP, the German oilseeds industry association that the country’s rapeseed sowings had fallen by 1.9% to 1.28m hectares – a figure which would be the lowest in 14 years.

 

UFOP said that the decline reflected in part poor weather, which prevented farmers from undertaking their intended sowings, but noted too some switch away from the crop for reasons of crop rotation, with successive rapeseed plantings risking the spread of diseases such as club root.

 

Germany is the EU’s second-ranked producer of both rapeseed and wheat.

 

Barley up, corn down

 

Strategie Grains said that some of the area lost to sowings of wheat – of which the vast majority is autumn planted in the EU – would be switched to barley.

 

The group forecast EU barley area for the 2018 harvest at 12.4m hectares, a rise of 300,000 hectares, an increase down to spring crop.

 

“Spring barley… picks up additional acreage for 2018 as a result of the arduous conditions for winter cereal sowings in north Europe and the current favourable price context for barley,” the group said.

 

Corn seedings were see falling by 200,000 hectares year on year to 8.5m hectares, well below the 9.8m hectares recorded in 2013, with price weakness blamed for the decline.

 

“Once again, grain maize’s attractiveness to farmers has been hit by this crop’s weak competitive position,” Strategie Grains.

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