Tuesday, July 24, 2018

"As wheat harvest heads to parched north, Europe braces for more losses"

From Black Sea Grain, July 23:
Europe’s grain market is bracing for more downgrades to the size of this year’s wheat crop as harvesting reaches the northern regions that have been worst hit by exceptional drought and heat since spring.

Germany, the European Union’s second-largest wheat grower, has been a focus of concern, and comments this week by the country’s farming association saying it could not forecast the crop because of uncertainty about weather damage have added to market jitters.

Harvesting is under way in south and central Germany and is spreading north to the regions most badly damaged by dryness.

“I think it pretty likely that the association will cut its forecast of the wheat crop in coming weeks as the harvest results arrive,” one German analyst said.

“The association cut its forecast of the winter barley sharply after the final northern and eastern areas were gathered where the damage was severest.”

The DBV farming association already forecast on July 5 that Germany’s winter wheat harvest will fall 15% from 2017 to 20.5 million tons. It declined to update the number this week but sharply lowered its winter barley crop estimate.

Neighboring Poland is also expected to see a significant drought impact, while harvest rain was now slowing field work.

Poland’s wheat output may fall 10% from 2017 to about 10 million tons, Sparks Polska forecasts.

“The winter wheat harvest started 2-3 weeks earlier than normal, but now it has been hampered by wet weather,” Wojtek Sabaranski of the analyst firm said.

As well as slowing field work, rain around harvest time can damage wheat quality, and downpours in southeastern Europe have raised concern that exporting EU members Romania and Bulgaria may have less milling-grade wheat than usual.

In Britain, the wheat harvest has just got underway earlier than normal, with a smaller crop widely anticipated.

Crop analysts expect production to fall below 14 million tons, well down on last year’s 14.8 million and the lowest since 2013....MORE
Also at Black Sea Grain:
Finland set to have its lowest grain harvest of the 21st century

The century is young.
Snark aside, my first thought on seeing that headline was Finland's Great Famine of 1866 - 1868 and that it's a good thing for consumers that grain is a worldwide market. And a not so good thing for speculators. Which might be a good thing.