Cereal production likely to be below average

Cereal production in the European Union is forecast to be below average for a second year while the overall international market is experiencing record productions in some countries.

According to the summer short-term outlook report published by the European Commission, adverse weather conditions in various regions in Europe means cereal production is likely to be slightly below average.

Heavy rains and severe droughts have pushed yields downwards, particularly in Spain where the projected winter barley yield is 21% below the trend, and spring barley is 33% below.

Other areas of concern include north-western France and Belgium, where the combination of a dry May and a hot June resulted in unfavourable conditions for most winter and spring crops.

As a result of this overall EU exports will be down and EU stocks are expected to tighten in the coming months.

Balanced by an increase in international cereal production, overall supply is expected to be ample and world prices are not likely to be significantly affected.

For the 2017-18 year, the global cereal harvest is estimated to be just over two billion tonnes, which even though it is 3% lower than last year, a high level of supplies following two ample harvests suggests global supplies will remain strong.

The report said the harvest of 2016-17 has been confirmed as having the largest global cereal harvest in history.

Despite record consumption levels, global stocks are expected to rise further at the end of this term to more than 500 million tonnes.

In the 2017-18 year up to 740 million tonnes of wheat are expected to be produced globally.