Rains Hit W.Europe Wheat, Drought Devastates East
Date: 27-Jun-07
Country: UK
Author: Nigel Hunt
Showers have spread across much of France, including large grain growing regions, heightening worries about the quality of wheat and barley harvests.
"Every day that goes by, the risk of a lower quality harvest is rising," one trader said.
Farmers in Ukraine, by contrast, have been pleading for rain to salvage some of their wheat crop, with southern and central regions facing the worst drought in a century.
Early winter wheat yields averaged about 1.31 tonnes per hectare and barley 1.57 tonnes in the central Dnipropetrovsk region, sharply down from an average grain yield of 2.48 tonnes last year and 2.85 tonnes in 2005.
Forecasters says drought has affected about 60 percent of Ukraine's grain and the government has already imposed stringent limits on exports.
QUALITY CONCERNS
Storms and showers have knocked down crops in France and Britain, damaging the prospects that wheat will be of sufficient quality for milling.
"With exceptional rainfall throughout June, we are becoming concerned that milling quality is going to be affected," said Simon Ingle, head of milling for UK farmers cooperative Grainfarmers.
French traders said the premium for milling wheat had risen to an unusually high five euros for delivery in Rouen.
"The drop in quality may hamper exports and may thus be considered as a bearish factor but at the same time if bad weather continues in northern France it could lead to lower yields and support prices," analyst Agritel said.
Rains were also a major factor supporting prices in Germany this week.
"German milling wheat prices are holding at a high level...Farmers are reluctant to sell as they expect firmer prices for good quality wheat," a trader said.
A heatwave in Greece has dealt a further blow to an already damaged harvest, according to farmers.
Soft wheat yields have fallen to about 400 to 500 kilos per acre, compared with more than 2,000 in a good year, farmer Charalambos Orfanidis said.
Government officials said Greece would see of a drop of about 30 percent in its grain harvest this year.
Temperatures in Italy have also soared during the past few days but the heatwave looks set to abate, said Rolando Manfredini, a weather analyst at farmers' group Coldiretti.
"If (the hot weather) continues, there could be damage. We have to wait a few more days for a more clear situation," he said.
LOW YIELDS
One broker in Italy said yields for some varieties of wheat were low, touching 3.5 to 4.0 tonnes per hectare.
"In general we are waiting for a harvest whose quality is not good and production is low," he said.
Hungarian farm group MOSZ said the quantity of grain harvested has disappointed in many places.
"It can be said in general that the harvested quantity is less than hoped for or previously estimated," MOSZ Secretary Istvan Toth told Reuters.
But Toth said the relatively dry weather has helped crop harvesting and most of the damage had been done by earlier drought, especially a dry spell in April.
In Spain, Gregorio Juarez, spokesman for farm union Asaja, said the grain harvest looks fine thanks to a wet winter and spring.
"We do have some problems (with water restrictions) but the problems we have are left over from the drought we had last year, which left some reservoirs low," he said.
"The problems are mainly in Murcia, Almeria, Alicante, Valencia but generally we had abundant rain throughout Spain in the spring and the winter was good."