Tale of two continents: US wheat forecast raised as European estimate dips

By Vince Bamford

- Last updated on GMT

US has enjoyed excellent crop conditions - in contrast to parts of EU. Pic: © iStock
US has enjoyed excellent crop conditions - in contrast to parts of EU. Pic: © iStock

Related tags European union Europe Wheat

Record winter wheat yields have been predicted for the US - while bad weather has taken its toll on some European wheat crops.

Stats from the US Department of Agriculture’s World Agricultural Supply and Demand Estimates published yesterday (July 12) have increased expected production from across the wheat belt.

US winter wheat yields are projected to be a record high, according to the report, while spring wheat yields are slightly above average.

The larger supplies – and consequent price competitiveness with corn - have brought an increase in feed and residual use forecast  in the US for 2016/17.

Expected US wheat exports are tipped to increase, by 25 million bushels to 925 million, which would be the highest level in three years.

Global wheat supply up

Global wheat supply is also raised in the report, with favorable weather expected to drive strong production in Russia and Ukraine. Estimated production for Argentina, Australia, and Canada has also been raised.

But these increases are partially offset by a decrease for the EU as a result of heavy rain in Western Europe.

France and Germany, the two largest producing regions in the European Union, have been particularly hard hit. Harvests from both countries are expected to be below initial expectations as a result of heavy rainfall and floods in late May and early June, according to commodities analysts Mintec.

Risk of lower protein levels

“This has also raised concerns over the possibility of lower protein levels, as well as increase in the risk of disease, fungi and insects, which can reduce the quality of the crop​,” Mintec senior data analyst Avneet Deol told BakeryandSnacks.

She added the wheat crop was already vulnerable to disease and pests, as a result of a warmer than usual winter.

One example of a known disease that lasted through the winter and has spread due to the wet weather is the yellow-dwarf virus, which stunts the growth and causes decolourisation of the crop​,” she added.

The drop in production in France and Germany was likely to threaten the competiveness of EU wheat and affect trade to key markets such as North Africa, warned Mintec.

Eastern and Southern Europe unaffected

There was better news in some parts of Europe, with the east and south of the continent  – such as Romania and Spain – unaffected by the weather.

Total EU production is forecast at 157.5m tonnes, which is down 2% year on year but is still the second highest crop on record.

However, Copa & Cogeca – which represents European farmers and agricultural co-operatives – warned the situation for soft wheat and barley could worsen and that figures “will probably​” be revised downwards.

Many countries have had a big problem with pests and disease this year​,” said chairman of the Copa & Cogeca Cereals Working Party, Max Schulman.

It is becoming more difficult to fight them as they become more resistant to crop protection products," ​he added. "There is a real lack of effective crop protection products and consistent tool box to manage risk at field level.”

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