News 467 views last update:6 Aug 2012

EU 2010 wheat harvest to increase

French analyst Strategy Grains on Thursday slightly raised its production forecast for 2010 wheat and corn harvest in the 27 member states of the European Union but has reduced the estimates for barley.

For the next marketing year 2010-2011 (July-June), the EU could have a production of 133.7 million tonnes of wheat, or 380,000 tonnes more than last month estimate and up 3% compared to the current campaign.
The slight increase is mainly due to the upward revision of surfaces planted in Romania and Germany.
This estimate has, however, a potential change of about 10 million tonnes upwards or downwards depending on weather conditions in coming months including the mild weather of recent days after the recent cold period with frost of the last weeks.
"An episode of freezing and thawing on bare soils could have a very negative impact on crops," explains the analyst group.
Decline in demand
In terms of balance, and its first estimate for the next campaign Strategy Grains (SG) expects a decline in domestic demand for wheat in 2010-2011, in particular in animal nutrition because of reduced competitiveness of wheat in relation to the barley.
This decline was offset by increased exports to third countries for a rebound in international demand, but stocks of the early campaign may put pressure on those of the end of the season. In the end the balance for 2010-2011 stocks remain high, SG said.
Barley prices under pressure
For barley, the analysts have cut its forecast by 530,000 tonnes, taking into account a significant decline in area in Germany in favour of wheat. The barley estimate falls to 58.2 million tonnes, down 6% compared to the current campaign.
But as for wheat, the figure still has potential for variation of about 5 million tonnes depending on the weather, said SG.
Unlike for wheat, the first estimates of supply and demand for 2010-2011 predict a reduction of inventories at June 30, 2011.
The use should increase domestic and intra EU because of lower availability. Similarly, exports to third countries should increase over the current campaign.
Prices of barley, however, should remain under pressure due high stocks, withdrawal from the EU-intervention platform and global barley situation which not looking too good, SG said.
Corn production up
The European corn harvest estimate is up by 130,000 tonnes, and adjusted to 57.8 million tonnes which would represent a gain of 2% compared to 2009-2010. The durum crop is expected at 8 6 million tonnes, 7% better.
For all cereals, European production was almost unchanged compared to 2009-2010: 292.1 million tonnes against 291.2 million.

Dick Ziggers

Or register to be able to comment.