22 May 1998

Production of grain to drop?

GRAIN production is set to fall next year, latest estimates reveal.

COPA/COGECA, the EU farmers unions and co-operatives group, expects the European cereal harvest to fall 1.5m tonnes to 204m tonnes. And COCERAL, the European grain trade body, puts the new crop at just over 201m, down 0.3% on last year. However, it expects the wheat crop to rise 3.9% to just over 90m tonnes.

The USDAs first estimate of the world wheat crop, at 597mt, is 14mt down on this season.

How much impact that will have on farm prices is open to question. "Guarded pessimism," says Dalgetys Trevor Harriman, citing a big carryover and falling consumption is some areas. "Plus the Eastern Europeans need and want to sell – and sell for cash."

Such sentiments have pushed new-crop down in value, he says, with November wheat futures at £78/t on Wed-nesday.