June 18, 2020 / 1:23 PM / 16 days ago

Favourable June weather seen averting more EU wheat losses

PARIS, June 18 (Reuters) - Showers and moderate temperatures in much of Europe so far this month should prevent further damage to wheat crops but they have come too late to avoid a much smaller harvest this summer after a wet autumn and parched spring, analysts said.

The European Union’s crop monitoring service MARS on Monday again cut its monthly yield forecast for the EU’s soft wheat crop, projecting a 6.6% fall from last year’s level after plants suffered from a lack of moisture.

Coupled with a decline in the crop area, mainly due to waterlogged sowing conditions last autumn, analysts are widely expecting a sharp decrease in production in the EU and Britain.

“The crop seems to be in worse condition than last year, in particular in Central Europe, where soils have been unusually dry,” said Aaron Grau, a crop analyst at Refinitiv Agriculture Research.

“The recent rainfall could not offset the early lost yield potential.”

However, more clement weather this month has allayed fears of a dire harvest such as the one two years ago when northern Europe was ravaged by drought.

In France, official crop ratings for soft wheat stabilised in early June although they remain at their lowest since 2011.

MARS’ forecast of a French soft wheat yield at 6.58 tonnes per hectare signals a crop of just over 30 million tonnes, given France’s official crop area estimate of 4.6 million hectares.

But most traders and analysts are expecting production to fall less steeply from last year’s big harvest of 39.5 million tonnes, seeing a crop of 32-33 million tonnes.

A drier spell forecast for next week could help French wheat ripen before an expected early start to harvesting in late June.

In Germany, the country’s association of farm cooperatives on Wednesday trimmed slightly its wheat crop forecast compared with last month, now projecting a 3.7% year-on-year drop to 22.21 million tonnes.

“The rain came too late to achieve a significant increase in crop yields,” the association said.

“The rain, sometimes heavy, was good for crops but was only enough to stabilise the forecast.”

In Poland, recent rain has also helped crops, said Wojtek Sabaranski of analysts Sparks Polska.

He still expects a Polish wheat crop of 11.1 million tonnes, little changed on the year.

“There is a growing chance for bigger output, but we’re still two months away from the harvest,” he said.

In Britain, MARS forecast an 11% drop in average yield from last year due to dry conditions up to June 10, and traders and analysts generally expect production to plunge to below 10 million tonnes from last season’s 16.3 million, as the planted area has also declined steeply.

“More rain has fallen since June 10, which will have been beneficial, but it’s been variable and sometimes localised,” Britain’s Agriculture and Horticulture Development Board (AHDB) said in a note this week.

Reporting by Gus Trompiz in Paris, Michael Hogan in Hamburg and Nigel Hunt in London; editing by David Evans

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