WINTER BARLEY PRODUCTION IS EXPECTED TO BE DOWN BY AS MUCH AS 13PC ON 2015

as much as 13pc compared to 2015, with winter wheat down 5pc.

The latest estimates from the USDA puts total global production of wheat and coarse grains for the current year up by over 80 million tonnes on 2015/16 production and up over 30 million tonnes on 2014/15 (Figure 1).

This story of a significant upward movement in world grain production is forecast despite the decrease in EU wheat and barley production, predominately due to disappointing yields in Western Europe (see Figure 2).

The lack of sunshine coupled with heavy rains in the spring coincided with fertilisation and grain fill which are critical phases in terms of yield formation. This caused damage on a large scale in France, where all the main soft wheat growing regions saw yield losses.

Consequently, the French soft wheat harvest has been described as calamitous, with production down over 25pc on last year.

Even the latest USDA WASDE update for September has done very little to uplift the market.

The biggest development from the latest report was that the forecast for global wheat exports were revised up by over 2 million tonnes, with increases for Australia, Brazil, Kazakhstan and Ukraine offsetting a 1 million tonnes reduction for the EU.

Total carry out stocks in 2016/17, which is the real decider in terms of price formation, is forecast to increase by nearly 100 mt since the 2013/14 marketing year.

Fiona Thorne is an economist with Teagasc