"We had hoped the wheat harvest would be finished by now but between 40 to 50 percent of the crop in the major north German wheat export regions is still in the fields waiting to be cut," one German trader said.
"I think it looks pretty certain that significant quality loss has been suffered and the volume of good quality wheat available for export in the next year will be a lot lower than we thought at the beginning of August."
Germany, the European Union's second-largest wheat producer and exporter after France, was hit by rain throughout August and the harvest is still unfinished in the northern export areas of Schleswig-Holstein, Mecklenburg-Vorpommern and Lower Saxony, traders said.
Germany's farm cooperatives association now forecasts that Germany's 2017 wheat harvest will fall 0.5 percent on the year to 24.34 million tonnes after persistent rain damaged the crop. In July the association had forecast the harvest would rise 3.8 percent on the year to 25.39 million tonnes.
"I think 40 to 60 percent of the wheat is still to be harvested in Schleswig-Holstein and Mecklenburg-Vorpommern," said a purchaser at one German flour mill. "In Lower Saxony and Brandenburg about 15 to 20 percent is still in the fields."
Traders and mills reported problems with the quality criteria Hagberg falling numbers and specific weight, but said that protein content was reasonable. There is also concern about sprouting and mycotoxins in the final areas to be gathered.
"I am comfortable that mills will get sufficient supplies from the new crop as Germany only consumes about 8 million tonnes of wheat a year for flour production," one trader said. "But I expect the volumes of bread-quality wheat Germany will export will fall in the new season."
"More rain fell again in north Germany on Monday, again delaying harvesting. Every day of delay increases the likelihood that the final areas to be harvested will only reach feed quality."