The European Union slashed its forecast for this year’s corn harvest, as consensus grows around the yield damage wrought by hot and dry weather which looks like continuing in many parts of the region.
The European Commission, the executive body of the EU, lowered its forecast for corn production in the bloc by almost 3m tonnes to a three-year low of 65.5m tonnes, down from an estimate of 68.4m tonnes last month.
This is a fall of 15.8% from the record 77.75m tonnes reaped last year.
The commission also lowered its estimate of the bloc’s rapeseed harvest by 1m tonnes to 20.7m tonnes.
IGC trims estimates
Fears have been growing for EU grain crops after a spell of hot dry weather which is still dogging parts of the region.
MDA forced that this week dryness “will continue to stress” autumn-harvested crops such as corn “across central and southern areas”.
And rival weather service WxRisk.com said that a “European/ Ukraine heatwave looks likely” in both six-to-10-day and 11-to-15 day outlooks.
Last week saw a slew of downgrades to EU corn hopes in particular.
Crop agency Agritel on Monday noted that the “negative impact of water deficit has mainly hit corn, especially in non-irrigated areas”.
France takes hit
Last week the International Grains Council trimmed its estimates for this year’s corn harvest to 66.9m tonnes, down 0.7m tonnes from last month’s estimate, and 12% down from last year’s 75.6m-tonne harvest.
Last week also saw Mars, the EU’s crop-monitoring service, cut its yield forecasts for corn to 6.7 tonnes per hectare, down from 7.22 in the previous month.
France has been particularly hit by dry weather. On Friday last week the official French crop body FranceAgriMer cut its rating for domestic corn to 59% good or excellent, down 3 percentage points from the previous week.
And Soren Schroder, chief executive of food group Bunge, told investors last week that the poor EU corn harvest could necessitate rising imports of the grain from Brazil.
The commission also made a deep cut, of 2.2m tonnes, its estimate for the bloc’s soft wheat stocks at the end of 2015-16, forecasting them at 10.55m tonnes.
The downgrade reflected a combination of factors, including a lower harvest estimate, cut by 500,000 tonnes to 139.45m tonnes, and higher forecasts for exports and for feed use of the grain.
Prospects for rapeseed production were also reduced, after the EU’s Mars agricultural meteorology division cut its estimate for the 2015 rapeseed yield to 3.23 tonnes per hectare, against 3.28 tonnes per hectare seen last month.
Also on Monday, agricultural consultancy Strategie Grains downgraded its estimates for 2015 rapeseed production to 21.40m tonnes, from 21.78m tonnes last month.
The downgrade was caused by a reduction in planted area, as well as a trim to yield forecasts, to 3.32 tonnes per hectare from 3.33 tonnes per hectare last month.
No price boost
But the effect on European prices remains limited, thanks to expectations of ample global supply.
Commerzbank noted on Monday that thanks to ideal weather in the US “expectations of high worldwide supply are weighing on corn prices”.
“The critical reports about the condition of corn plants in the EU are thus lending only limited support to the price in Paris”.
August Paris corn was down 1.0% to E172.5 a tonne in early afternoon trades, while Paris rapeseed was down 0.5% to E375.25 a tonne.
(Source – http://www.agrimoney.com/news/eu-cuts-hopes-for-heat-stressed-corn-crop–8644.html)