Hot weather in southern Europe has threatened to dent this summer's grain crop, which with the worst drought in Iberia in 60 years, has helped dampen fears of excess supplies next season, analysts said on Tuesday. Spain and Portugal, both net grain importers, have been the worst affected, seeing cereals crops halved by severe drought in damage running to billions of euros. But the damage has started to spread.
Ten days of high temperatures in France have begun to hit yield prospects, which while still high, are looking below the near record levels achieved last year, analysts said, but noted that forecasters see storms across the country later this week.
"There will be a loss of yields due to crops withering. It's still hard to say how much but provisionally we estimate losses up to one million tonnes," analyst Strategie Grains said. The analyst had put French soft wheat output at 38.92 million tonnes in mid-June, before the latest heatwave. This compared to 37.63 million tonnes last year.
"We potentially had a very good crop, so we'll either be at last year's level or a little bit below, but we certainly won't be at the catastrophic levels of 2003," it said, referring to the heatwave that year that cut the crop to 29 million tonnes.
Maize output was also expected down due to a lower area sown and delayed plant development, but the analyst stressed the importance of July and August rain for the late-harvested crop.
There are now some 32 French departments, almost a third of the country, under irrigation curbs due to low water levels.
Italian farmers also said rain was needed in the next week or so, or dry weather would damage maize and sugar beet plants.
"People are very concerned about the drought, particularly for maize," a senior north Italian grain trader said.
"If it rains in the next week, the problem will be solved."
In the east, there also some concerns. Hungary still expects an above average grain crop of 16 million tonnes, although western parts of the country recently reported some damage after a few very hot days, Mihaly Guba, the head of the grain section of farmers association MOSZ told Reuters.
In Germany and Britain the picture was more positive, but analysts stressed the crops were not as advanced as in France.
"Plantings need to catch up on growth following cool weather in late May," one German analyst said. "Fears the wheat harvest could be delayed have now been substantially removed."
"The picture in Germany is currently more positive than in several other European countries," another analyst said. "We actually need a lot of sunshine now to guarantee a high quality level and dryness cannot be regarded as a significant problem."
In Britain, crops were generally growing well and forecasts of showers over the next few days had helped to ease some fears over the recent hot and dry spell, traders and analysts said.