Drop from 2011 output Forecast cuts wheat by 4.3 million tonnes, barley by 1.1 million tonnes and durum by 600,000 tonnes
PARIS, France (Reuters) — Analyst Strategie Grains has again cut its forecasts for winter grain crops in the European Union because of the impact of frost and drought.
The new forecast raises the prospect of tight wheat supply in Europe next season.
The analyst lowered by 4.3 million tonnes its forecast of the EU’s main soft wheat crop to 126.8 million tonnes, now putting production below last year’s 129.1 million tonnes.
It also cut its outlook for the barley crop by 1.1 million tonnes to 52.4 million, still up one percent from last year, and lowered its durum forecast by 600,000 tonnes to 7.8 million, leaving the forecast down six percent from 2011 output.
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“We now estimate that six percent of the area originally sown with winter crops will need to be replanted as a result of the severe frosts in February,” Strategie Grains said in the report.
“Soft wheat and winter barley account for more than half of the 2.5 million hectares (6.2 million acres) that will need replanting.”
Meanwhile, drought in southern parts of the EU intensified in March, with Spain and Portugal worst hit, the analyst said.
“We have therefore revised down our yield forecasts in all the countries impacted by the frost and drought, but our estimates retain a high variation potential,” it said.
The company stressed that weather in the coming weeks would significantly influence yields.
The analyst had already lowered its forecasts of EU winter grain production in its March crop report, citing frost damage and the developing drought.
It had left average yields for soft wheat and barley unchanged but warned they could be reduced if dryness continued.
The reduced harvest outlook this month would leave the EU wheat supply relatively tight next season, with prices having the potential to rise to curb demand, Strategie Grains said.
“In the EU, at current prices, the outlook is now tight due to the re-duced harvest forecasts and the existence of incompressible demand (industrial and exports to North Africa),” it said.
The decreased crop forecast led the analyst to cut by three million tonnes its forecast of EU soft wheat exports next season to 13.5 million tonnes.
Coupled with damaged harvest prospects in North Africa, the Middle East and the Black Sea region, the EU situation would also cut into world wheat supply.
“In conclusion, the outlook for wheat in 2012-13 is no longer heavy, either at the EU or global levels,” it said, referring to supply levels.
