The grain harvest in the European Union, the world’s third-largest grower, is unlikely to ease a global supply shortfall as dry weather hurts yields from Spain to Romania and British crops are delayed by rain.
France and Germany, Europe’s top growers, are set to boost grain output by 8.5 percent this year, not enough to offset declines in the U.K., Spain and Italy, according to Hamburg- based trader Alfred C. Toepfer International GmbH. Europe’s wheat harvest may be the smallest in five years, helping send stockpiles at the end of the 2012-13 season to 10.9 million metric tons, the lowest since at least 1999, U.S. Department of Agriculture data show.
Milling wheat surged 35 percent this year on NYSE Liffe in Paris on concern dry weather would spur Russia, last season’s third-biggest exporter, to restrict shipments. Corn rallied to a record last month on the Chicago Board of Trade as top producer U.S. suffered its worst drought in more than 50 years. While world consumption of grains may exceed output for the second time in three years, European shipments will be steady from the previous season, International Grains Council data show.
“Overall supplies will be tighter than they were last year,” Amy Reynolds, an economist at the London-based IGC, said by telephone Sept. 3. “While there may be strong export demand for EU grain, the amount Europe is able to export won’t really increase.”
Fewer supplies may spur a 9.1 percent drop in global grain trade this season, the biggest decline since 1986, to 289.37 million tons, according to the USDA. Shipments include nine grains, ranging from wheat to rice to barley, tracked in the department’s monthly world supply and demand report. China is the world’s largest cereal producer, followed by the U.S. and the EU, according to the USDA.
Crops are the best performing commodities this year on the Standard & Poor’s GSCI gauge of 24 raw materials, led by a 46 percent jump in soybeans and 35 percent gain in wheat. The MSCI All-Country World Index of equities rose 6.9 percent. Treasuries returned 2.5 percent, according to Bank of America Corp.
EU cereal production may be 279 million this season, about 2 percent smaller than the five-year average because of dry weather in some regions, the European Commission said Aug. 31. The soft wheat harvest may be 127 million tons, similar to the previous average, while corn output at 60 million tons is expected to be about 2 percent higher than normal.
Farmers are finished harvesting soft wheat in France, according to crops office FranceAgriMer, while some grain still needed to be collected in northern Germany, Toepfer said Aug. 23. In the U.S., farmers are just beginning to harvest corn, while Russia has collected 62 percent of its grains and legumes, government data show.
German grain production may climb 6.7 percent from last year to 44.7 million tons, after a cold snap last February failed to dent the country’s crop, the Agriculture Ministry said Aug. 31. Toepfer pegs the German harvest at 45.2 million tons, and France’s crop at 69.15 million, 8.9 percent more than a year earlier. Still, combined grain output in the U.K., Spain and Italy may be 11 percent below a year earlier, the company said.
In the U.K., the harvest started about 10 days later than normal because of rain, and crops on about 40 percent of the country’s wheat area had been collected as of Aug. 28, the Agriculture and Horticulture Development Board said.
The U.K. had its wettest summer since 1912, with the fewest hours of sunshine in the three months through August since 1980, the Met Office said Aug. 30, citing provisional data. Testing of the country’s winter-wheat crop showed 97 percent of samples had signs of fungal diseases that can reduce yields, with some fields carrying species that can be toxic to humans and animals, crop-quality service CropMonitor reported Aug. 23.
Quality Affected ...
Source: Argentine Beef Packers S.A.
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