Agriculture • German, UK fears stymie revival in EU wheat hopes
German, UK fears stymie revival in EU wheat hopes
The revival in hopes for the European Union wheat harvest went into reverse as German farmers raised doubts over forecasts of increased production, and the UK crop was identified as ripe for downgrades.
Deutscher Bauernverband (DBV), the German farmers’ association, pegged the domestic wheat harvest at 21.9m tonnes, well below last year’s 22.7m-tonne harvest, which many analysts have forecast will be exceeded this year.
Strategie Grains, the influential analysis group, last week lifted its forecast for the German wheat crop, the European Union’s second biggest, to 23.4m tonnes, as it raised its estimate for the bloc’s total harvest, including durum, by 1.9m tonnes to 133.3m tonnes.
The DBV downgrade reflected localised cases of "massive winterkill" in a February cold snap which had prompted large-scale resowings of wheat fields typically with other crops. Spring wheat area expanded by some 50%, but to a relatively small 153,000 hectares.
‘UK downgrades ahead’
The data followed a caution from broker FCStone over the damage to wheat prospects in the UK, the EU’s third-ranked producer, thanks to persistent rains which have cut hopes for a rise in sowings being reflected in extra production.
"Results coming from the field in the UK continue to foster a large degree of variability, with test weights and falling numbers falling and premiums for quality receiving plenty of support," the broker said.
"At least 1m tonnes will be shaved from UK wheat output estimates, taking it down to the mid-to-low 14m-tonnes range," compared with 15.3m tonnes last year.
With prospects for quantity, as well as quality, UK wheat users have been importing from continental European countries such as Denmark, as well as Germany, an important source of harder milling varieties, Agrimoney.com has been told.
Indeed, Deutscher Bauernverband acknowledged the support to crop quality from an improvement in weather towards the end of the growing season.
UK wheat production and (plantings)
2012-13: "mid-to-low 14m tonnes", (2.01m hectares)
2011-12: 15.26m tonnes, (1.97m hectares)
2010-11: 14.88m tonnes, (1.94m hectares)
2009-10: 14.08m tonnes, (1.78m hectares)
2008-09: 17.23m tonnes, (2.08m hectares)
Sources: Agrimoney.com, Defra, HGCA
With recent weather "mostly good, winter wheat could be harvested often with satisfactory moisture content", reducing the need for drying and protecting protein levels in many key growing areas.
At FCStone, Jaime Nolan Miralles said: "The big issue was about quality more than quantity," given earlier fears that the French crop, the EU’s biggest, and largely of soft milling varieties, had suffered significant weather damage too.
"On that score, we got out of jail with France to a large extent," given a late turn drier in the weather. "It looks like something similar happened in Germany too."
The DBV was more upbeat over Germany’s barley production, pegging it at 9.8m tonnes, a rise of 12% year on year, with hopes of substantial amounts of spring crop making malting grade.
Spring barley was of "generally good quality", and largely of lower protein levels, below 11.5%, demanded by brewers.
With France too appearing to have harvested a good-quality spring barley crop, prospects appear good for malting barley supplies outside the UK, where Scotch whisky distillers may be forced to look outside Scotland for supplies.
For rapeseed, the association foresaw a recovery in production to 4.4m tonnes, thanks to a recovery to 3.4 tonnes per hectare in the average yield.
On the London futures market, feed wheat for November delivery rose 1.0% to a fresh contract high of £208.60 a tonne as 15:15 UK time (09:15 Chicago time), contrasting with falls in the grain on other markets.
London prices are being given an extra boost by the prospect of the Ensus bioethanol plant in northern England reopening, with capacity for more than 1m tonnes of wheat a year, with the Vivergo plant, of similar size, set for launch in the fourth quarter.
In Paris, soft milling wheat was 0.1% lower at E267.50 a tonne, while Chicago’s December lot was 0.5% lower at $9.17 ½ a bushel.
Statistics: Posted by yoda — Wed Aug 22, 2012 3:21 pm
View full post on opinions.caduceusx.com