French analyst Strategie Grains on Thursday cut its forecast for this year's soft wheat crop in the European Union by 3.6 million tonnes to 131.5 million tonnes, mainly due to the impact of drought in the west of the bloc. The new forecast was still 4 percent above revised 2010 production of 126.4 million tonnes, it said in a monthly report.
Strategie Grains lowered projected production in west EU countries by 3 million tonnes, while also revising down forecasts for Lithuania and Poland due to earlier winterkill. "There has been very little rainfall since last month in most European countries and yield potentials for wheat and barley in several countries have already been impacted," it said.
"West EU countries are the worst affected by the deterioration in yield potentials." A prolonged dry spell has parched fields in the EU's top three wheat producers - France, Germany and Britain - fuelling expectations that wheat yields will be hit.
The reduced crop outlook led Strategie Grains to cut by 2 million tonnes its forecast for EU soft wheat exports in 2011/12 to 17 million tonnes. EU wheat stocks would remain relatively tight as expected higher international demand would offset renewed competition from Black Sea countries that were mostly absent from export markets this season due to drought-hit 2010 crops.
"We still envisage that the world market will require the totality of the EU's export availability despite the combined 14 million tonne increase in the availabilities in the Black Sea countries (Russia, Ukraine, Kazakhstan)," Strategie Grains said. The analyst also reduced its forecast for EU barley output this year, by 300,000 tonnes to 54.2 million tonnes, now up 2 percent on 2010 production.
A 900,000-tonne cut to projected output in west EU countries due to the impact of dry weather was mostly offset by a 400,000-tonne increase for Spain after good rainfall last month and a 300,000-tonne rise for expected spring barley output in the Baltic countries. The analyst cut its maize crop forecast by 400,000 tonnes to 59.1 million, as a 600,000 tonne cut to the French crop was only partly offset by gains in central and south-east countries. The revised outlook was still up 8 percent on 2010 output.