European wheat can’t take the heat
HARVESTS DROP AS PRICES SOAR
Searing heat has devastated wheat fields across northern Europe while a combination of dry conditions and extreme rain in the Black Sea have hit output estimates, with prices soaring on fears of further crop damage.
Evidence of serious harm to crops is growing as harvesting heads north in Germany, the European Union’s second largest wheat producer, and in Scandinavia, prompting further cuts to estimates for the 28-member bloc.
“The situation is catastrophic in northern Europe,” Strategie Grains head analyst Andree Defois said.
The consultancy last week cut its forecast for this year’s soft wheat harvest in the EU, collectively the world’s largest wheat grower, below 130 million tons – a six-year low – and Defois said it could revise the estimate again.
France, the EU’s top producer, has also experienced extreme weather, prompting forecasters to cut their estimates to about 34 million tons from 36.6 million harvested last year.
Scandinavia and other Baltic states have also suffered, with Sweden’s wheat crop seen falling 40%, while in Britain, where wheat crops are expected to fall to a five-year low, farmers are anxiously awaiting results.
“It’s far worse than we expected,” Sebastien Poncelet, analyst at Agritel said.
“It has been months since it has rained in some parts of northern Europe and in Germany there should be no rain for at least another two weeks.”
North Agritel revised its estimate for the European all-wheat crop by 3 million tons in the past week to 136.6 million tons – down 15 million on year, Poncelet said.
Wheat prices have surged more than 20% in European and US markets in the past three weeks on mounting worries over global wheat supplies.
Prices were also supported by a severe drought hitting crops in Australia. –