May 28, 2014
EU to reap biggest wheat crop since 2008
The European Union is set to harvest its largest wheat crop since 2008 this summer, as the bloc mostly escaped the harsh weather that hit the United States, trade analysts said.
Favourable conditions should keep average yields close to the strong levels seen last year and has also helped farmers to increase sowings this season, particularly in Britain.
Good EU prospects have contributed to a dip in international prices in the past two weeks- with Chicago wheat falling 9% from one-year highs- as investors set a weather-worn US crop against ample global supply. The United States and the EU are the world''s top two wheat exporters. A survey by Reuters of 12 analysts and traders gave a median forecast of 137.5 million tonnes for the EU soft wheat harvest. This was up from 134.3 million last year and the highest since 139.4 million in 2008, according to official EU figures.
However, persisting dryness in the north-east of top EU wheat producer France and heat in Spain this month are still of concern, and they serve as a reminder that crops are vulnerable to harsh weather in May and June, a critical yield-determining period. That said, these remain moderate risks compared with the drought, extreme cold and scorching temperatures faced by US wheat.
A recovery in wheat sowing in England and Wales, up 19% on the year according to an initial estimate by the Home-Grown Cereals Authority, was a key driver for the stronger forecast for EU.
The hefty EU harvest would also be supported by improved prospects this year in northern members like Denmark and Sweden, and expectations for large crops again this year in Poland and Romania.