Rain continues to help west European wheat plants recover from a spring drought but harvests in the top two producers France and Germany will still be down on the year, analysts and traders said on Tuesday. "West Europe is moving well away from the disaster that was facing us at the beginning of this month because of the drought," one German trader said. "Crop size and quality will be better than feared but it is too late for a full recovery in many areas."
Most analysts expect crops in major western EU countries to still fall on the year despite the late rain. The better crop outlook has helped push down wheat prices in past days, with benchmark European futures in Paris hitting a six-week low of 209.75 euros ($300.80) a tonne on Monday, down more than 17 percent from a contract high of 254.50 euros in late May.
In France, the European Union's top wheat producer, harvest prospects were improved by wetter, milder weather this month, analysts said. This year's crop is still expected to be sharply lower after a spring drought damaged plants and traders cautioned that rain could also hit quality if it continues as harvests approach. Some traders have raised their working estimate for France's wheat crop to around 32 million tonnes from 31 million at the height of the drought, still down 10 percent on last year's 35.6 million tonne crop. Current wet, cooler weather in France was particularly welcome for later-developing crops still going through grain-filling, said Jean-Paul Bordes of French grains institute Arvalis.
"More so than the return of rain it is the fall in temperatures that is favourable since it does not hamper grain-filling in later-developing zones," he said, adding that temperatures above 25 degrees Celsius stop grain-filling. After regular showers since early June, French grain belts in the northern half of France had rain at the weekend and on Monday, with more showers forecast before the weekend. But dry weather in coming days could allow wheat harvesting to start in western France, about two weeks earlier than usual, Bordes added.
GERMANY Widespread rain in Germany in the past week has helped wheat crops and wet weather is also forecast for this week. "This is likely to give some last-minute help on harvest quality but will be too late for a general recovery," one German analyst said. "The late rain will be good for grain pod filling which means quality will be better than expected."
The drought this spring means Germany's 2011 wheat harvest is forecast to fall 7.2 percent on the year to 22.32 million tonnes from 24.05 million tonnes last year, Germany's farm co-operatives association estimates. "The rain has not completely solved the problem with dryness since early May but it has brought some relief," one German trader said. "People are now starting to expect a German wheat crop down about 5-10 percent on the year against forecasts of a 10-15 percent fall at the beginning of June."
ITALY Wheat output in Italy, a major European grain importer, is expected to fall more than 10 percent this year after a wet winter caused a considerable drop in sown areas, according to official estimates cited by farmers group Coldiretti. But wheat quality appears to have survived a dry spell in May without causing any serious damage and yields per hectare are expected to be in line with last year's, Coldiretti's grains analyst Paolo Abballe said.
Soft wheat plantings were cut to 450,000 hectares in the summer 2011 harvest from 525,000 hectares in 2010, Abballe said, citing preliminary estimates by Italy's Agriculture Ministry and research centre ISMEA. Durum wheat sown area fell to about 1.1 million hectares from 1.286 million hectares last year. Soft wheat yields are estimated at about 5.3 tonnes per hectare while yields of durum wheat used for making pasta are seen at 3.2 tonnes per hectare.