EU wheat crops need sun after wet summer start

Wheat crops in west Europe urgently need sunshine to push them towards ripeness and high quality after a very wet and cloudy start to the summer, analysts and traders said on Tuesday.

Harvest forecasts are still generally optimistic for the top three EU producers France, Germany and Britain. But the wet weather which has spoilt countless holidays is now starting to worry wheat farmers.

"If the wet weather continues there will be fears of quality losses in several countries," one European trader said. "There is still time for a recovery if we get a good burst of sunshine so it is too early to add Europe to the problems seen in the U.S. and Russia."

U.S. grain futures soared on Monday as continuing dryness in the U.S. Midwest looked likely to ravage crops, and floods in Russia's southern wheat export region caused havoc.

France, the EU's largest wheat producer, should harvest 35.9 million tonnes of soft wheat this year, up 5.8 percent from 2011, the French farm ministry said on Monday in its first estimate of 2012 output. This was the same as estimated by French farm agency FranceAgriMer.

But repeated rain is making farmers tense with concern growing about whether the forecasts will be achieved. Rain in France last month was 20 percent above average.

"Farmers are living on their nerves," one trader said. "Harvest operations are being delayed and the start of the (marketing) campaign looks delicate."

The rain along with violent storms, has lodged (beaten down) some barley and wheat fields in leading French production areas, raising fears of yield and quality losses. The regions Centre, Ile-de-France around Paris and Picardy in the north were the most hit.

In France's early harvest areas southwest and the Atlantic coast, rains repeatedly slowed first wheat cuttings.

"Compared to the optimism of early June, these intense and persistent rains have damaged some of the potential," said David Gouache of French institute Arvalis.

Forecasters do not expect an improvement in French weather in the next few weeks. Quality concerns were raised by high humidity levels recorded in some areas during flowering stage, a period favorable to the spread of fungus, Gouache said.

GERMANY

Second largest EU wheat producer Germany has also suffered repeated rain.

"The rain helped wheat recover from the springtime drought but we have had enough now," one German analyst said. "There is growing concern that quality loss could occur if the rain goes on. But a good blast of sunshine would still bring wheat to ripeness on schedule."

Wet and cloudy weather is forecast for much of Germany up to Saturday.

German grain trading house Toepfer forecasts the country's 2012 wheat crop at 22.71 million tonnes, slightly above the 22.70 million tonnes harvested in 2011.

BRITAIN

The outlook for Britain's wheat crop has deteriorated in recent weeks with scant sunshine and abundant rains diminishing yield prospects.

"The big concern is the lack of sunshine we've had through June and into July now," said Jack Watts, senior economist at the Home-Grown Cereals Authority.

Britain's Met Office has reported that last month was the second dullest June on record, depriving crops of the sunshine they need to increase the size and weight of kernels.

"We haven't had favorable weather for grain filling so that is bound to have impacted yields," Watts said, adding that rain was also a concern. The UK experienced its wettest June since records began in 1910.

"Disease levels generally are high," he said.

The International Grains Council last week projected the UK wheat crop would total 15.0 million tonnes, slightly down from last year's 15.3 million.

ITALY

With wheat harvesting almost completed in Italy, traders and farmers say new crop is big and good quality which could trim import needs in the country, a major EU grain importer.

"There may be some small contractions in yields in the northern regions, but yields are good in the south," said Paolo Abballe, grain specialist at Italy's biggest farmers group Coldiretti. "On the whole, wheat looks good this year."

There has been no water crisis so far this year thanks to a wet and snowy winter, but the use of irrigation resources has increased in the past few weeks due to extremely hot and dry weather, the Italian irrigators' body ANBI said in a statement.

Italy's soft wheat output is expected to jump 17.5 percent this year to 3.34 million tonnes thanks to a nearly 17 percent rise in plantings to 620,000 hectares and a 0.6 percent improvement in yields to 5.4 tonnes per hectare, said farm research centre ISMEA. (Reporting by Michael Hogan in Hamburg, Valerie Parent in Paris, Nigel Hunt in London, Svetlana Kovalyova in Milan; editing by Keiron Henderson)
Hogan M., (2012), Reuters.

http://www.reuters.com/article/2012/07/10/wheat-europe-harvest-idUSL6E8IA7HD20120710