EU 28. Crop Update. Aug 2014 Aug. 29, 2014
Very good growing conditions across much of EU28 saw an early start to harvest. However, recent rains on the Continent have raised quality concerns for the otherwise large wheat crop. This is particularly the case in France, the EU28’s largest producer and exporter of milling wheat, and in Bulgaria and Romania. The EU28’s barley crop has been less detrimentally affected by the recent weather. The winter barley harvest is now all but complete with quality described as generally good. The spring barley harvest is reported to have got off to a good start. Finally, the recent mixture of sun and rain bodes well for an already well developed corn crop, pending no weather shocks through to harvest. With feed quality grains likely to be in abundance in MY2014/15 in the EU28, there is a significant focus on an expected reduction in exports. Combined with the large size of the overall grain crop, revised up 2.5 MMT to just over 306 MMT, there is also the potential for a large increase in otherwise low EU28 grain stocks.
HA = Hectares
MT = Metric Tonne
MY = Marketing Year. Post and USDA official data both follow the EU28 local marketing year of July to June except for corn which follows an October to September calendar.
TY = July to June for wheat and October to September for coarse grains
Very good spring growing conditions across much of the EU28 saw an early start to harvest and hopes were high for large, good quality wheat and barley crops and good development of the EU28 corn crop. However, persistent wet weather in parts of the Continent caused delays to both the wheat and barley harvests and increased quality concerns, particularly for wheat. The wet weather has been particularly troublesome in France as heavy and frequent rainfall through July has reduced the quality of its wheat crop. As the EU28’s largest producer of milling wheat and a major exporter, and with concerns also for the quality of the Bulgarian and Romanian wheat crops, this has put the spotlight on likely EU28 wheat exports in MY2014/15. The quality of the French barley crop has been less detrimentally affected while the excellent ground moisture levels bode well for the French corn crop. Elsewhere in the EU28, while the rain also affected the second half of the wheat harvest in the Czech Republic, other countries such as the UK and Poland escaped most of the bad weather and are expecting large, good quality wheat crops. Additionally, the overall quality of the EU28 barley crop is reported to be generally good and, pending any further weather shocks, the outlook for the upcoming corn harvest excellent. Overall EU28 grain production is forecast up 2.5 MMT on previous expectations, at 306.1 MMT. If achieved, this will be the second largest EU28 crop on record after the 312 MMT of MY2008/9. The wheat export forecast remains at 25MMT, the quality considerations outweighing the improved outlook for production, and remains subject to possible downward revision.
After an early start but significant delays along the way, the EU28 wheat harvest is now complete in the south of the EU28, in Italy, Greece, Spain and Croatia, is nearing completion in France, Hungary, Romania and Bulgaria, is well under way in Germany, Poland and the Czech Republic and proceeding slowly but steadily in the UK. Yields are generally very good, in large part due to the favorable growing conditions earlier in the year and a large crop is expected. The focus is now on the quality, not least due to the wet weather experienced by many Member States during harvest. Any downgrading of wheat to feed grade will see feed grain supplies increasing in a year when there are expected to be plentiful supplies of corn both in the EU28 and beyond.
Of most concern is the French wheat crop. This concern stems not just from the fact that very wet weather has disrupted the harvest and made conditions difficult, but that France is traditionally the largest producer and exporter of milling quality wheat in the EU28. Quality is reported to be down, with increased sprouting reducing the proportion of the crop that will be of milling quality. Not only will this jeopardize exports to traditional destinations, including North Africa, but will create domestic pressure due to the increased supplies of feed quality grain.
While other countries have experienced a wet wheat harvest, it was perhaps the advanced progress of the French wheat crop that left it most susceptible.
Elsewhere, the variability of the wheat quality is also of some concern in the Czech Republic, notably the later harvested wheat; in Bulgaria, where some regions suffered flooding and the quality is concerning exporters; and in Romania, where the trade is reported to have increased its use of dryers in an effort to meet export specifications. Drought reduced yields in Spain although this was limited to non-irrigated areas, which account for over 85 percent of the cultivated land. Spain also reports good quality, particularly for durum wheat both in terms of protein content and specific weight. Both the German and Polish wheat crops are seen larger than previously forecast with quality reported to be considerably better than France. Poland escaped much of the aforementioned harvest rainfall as has the UK, thus far. In the latter, with over half the crop now harvested and yields being reported as being at or near record levels, wheat production is also now expected higher than previously forecast.
Overall, total EU28 wheat production for MY2014/15 is revised up 4 MMT to be the second largest on record, just 1.5 MMT less than the record 158.5 MMT in MY2008/9. This means that despite increased forecast feed use of wheat in MY2014/15, both year-on-year and compared to previous forecasts, a rebuilding of ending stocks is to be expected. How much they will rise will largely come down to trade. The EU’s newly introduced Tariff Rate Quota for Ukrainian wheat has the potential to buoy imports and domestic supplies. Additionally, should the quality considerations see wheat exports not reach their current forecast of 25MMT, then this will also further support ending stocks.
The winter barley harvest is complete in most EU countries. Yields are generally good, although the aforementioned drought in Spain has reduced yields there, albeit not as much as for wheat. Quality is also reported to be good, both in terms of test weights and protein content, although there are reports of parasite damage in Italy, Greece and Croatia. The spring barley harvest has got off to a good start. Overall, at 56.5 MMT, total EU barley production is down 3 MMT on MY2013/14. Some early season export interest has been reported but year-on-year exports are forecast little changed.
On a reduced area as compared to MY2013/14, largely due to planting conditions, the corn crop is reported to be developing well in excellent conditions, the recent wet weather being particularly good for soil moisture levels. Of course, a close eye will need to be kept on the weather through harvest - a hot spell is now forecast in Romania and Bulgaria - but the sentiment is generally very positive and yields could yet rise on current forecasts meaning the current 67 MMT production number may be conservative. MY2014/15 corn imports are now forecast to reach 10 MMT, 5.5 MMT lower than currently forecast for MY2013/14. In this regard, an additional dynamic to watch will be the impact, if any, of the European Commission’s mid-July introduction of an import duty on corn (as well as sorghum and rye) in reaction to increased global supplies. Import duties were last in place in late 2010. Total MY2014/15 feed use is forecast marginally up year-on-year as are ending stocks but these numbers will ultimately depend on how heavy the overall feed supply situation in the EU28 becomes