Yield reduction after yield reduction can record the European grain harvest. Wheat as well as barley and maize will face production reductions. The hope for arable farmers is that this will increase prices. Production figures are also being tinkered with in Russia and the US. Cold and wet weather is the cause of this.
According to the most recent investigation report The European Commission puts the total European grain harvest at just under 305 million tons. That is 10 million tons more than last year, but well below the record of 328 million tons from 2014. In the June report, the European Commission lowers its expectations by 7 million tons. This mainly concerns barley and corn.
Total revenues 142 million
Coceral, the organization of European grain traders, speaks of a reduction of 6,8 million tons. They expect a total harvest of 298 million tons in the European Union this year. In contrast to the European Commission, Coceral has cut wheat production. A minus of almost 3 million tons, while the committee writes about 670.000 tons. The total yields both amount to approximately 142 million tons.
Unfavorable growing conditions
The EC reduces the barley yield by 3 million tons, to the smallest harvest in 5 years. The Mars report previously showed that the French and Spanish barley harvest is turning out worse than previously thought. Grain maize has to give up approximately 2,3 million tons, which is partly due to a lower acreage. The unfavorable growing conditions in Germany and Poland also contribute to this. The rapeseed yield has been adjusted slightly downwards, but is still higher than in 2016.
Wheat price outlook
The committee expects wheat exports from the EU to increase to 29 million tons. That is an increase of 5 million tons compared to the 2016-2017 season. The ending stock of soft wheat is therefore at the lowest level since 2013-2014, at 11,4 million tons. That offers prospects for the wheat price.
Increase
In the May monthly overview Politics and Weather at Play from Rabobank about the grain market in Paris and Chicago, the analysts are taking rising grain prices into account. For the Matif, it even sees an increase to 185 euros per tonne in the second quarter of 2018. This represents an increase of 12 percent. A slightly more modest increase of 9 percent is estimated for the CBoT. Converted to 156 euros per tonne.
Unfavorable weather type
The bank further writes that the American snowstorms of early May did little damage to wheat crops. A lack of sun and low temperatures are particularly unfavorable for wheat. This weather type will continue for the time being. According to the first results of wheat harvested in Texas, the protein percentage is 10 percent below average. An advantage of all the rain is that the supply of soil moisture is very good. Good quality wheat in particular (high in protein) is expected to rise in price.
Unusually cold in Russia
The Russian weather is also closely monitored by grain traders. A lot of rain has fallen, especially in southern Russia, and it is unusually cold. The south of this gigantic country accounts for a third of Russia's total wheat harvest. In 2 weeks, up to three times the average amount of rain fell, making plots impassable.
The forecasts have not yet been adjusted, because it is difficult to judge what the damage actually is. Estimates currently range between 63 and 69 million tons of wheat for Russia this year. It has also been very cold in central Russia and damage is predicted to crops such as corn, soybeans, sunflowers and rapeseed.