Cold weather impact cuts EU wheat forecast

Speculation continues about the extent of frost damage to crops in France and Germany, with Strategie Grains putting soft wheat output from the coming harvest at 126.8m tonnes against last year’s 129.1m tonnes and the French farm ministry reporting the loss of 350,000ha of winter wheat to the cold.

Damaged crops are mainly being replaced with spring barley and maize.

The EU’s MARS crop forecasting service sees grain, oilseed and root crop yields from the forthcoming harvest across the 27 member states at average levels.

Oilseed prices are firm on the back of reduced soya bean crop outlooks in Argentina and Brazil, along with heavy buying by the Chinese.

Old crop ex farm value for May is about £385/t while new crop at harvest as available is £369-370/t, with a £1 or so extra for those selling on a buyer’s call basis.

A relatively strong sterling and limited demand for oil was keeping a lid on further price rises but meal demand was good, said David Whyte of United Oilseeds.

China is expected to buy more than 50m tonnes of soya beans in 2012, when world oilseed production is expected to fall by 15m tonnes.

Within that, the EU oilseed crop is expected to fall to 18.5m tonnes although a higher area here means the UK is expected to produce a record crop this year.

Planting figures for Canada are expected shortly to show a new record oilseed rape area in that country while a bigger area in Australia is being driven by the crop’s increasing profitability compared with wheat.