Germany has scaled back grain yield estimations for the 2018-19 season by 10 per cent, as Europe suffers the effects of an ongoing dry spell.
The July International Grains Council grain market report showed a forecasted drop in world wheat and coarse grain production for 2017-18, with adverse weather conditions in Europe hammering prospects for wheat, maize, and barley.
In a statement last week, the German Farmers Association said the nation’s grain harvest for 2018-19 is a forecasted 41 million tonnes, a 4.5 million tonne drop from the previous season.
German Farmers Association president Joachim Rukwied said some farmers were yet to harvest their crops because of the drought.
“We will again have a harvest that is far below the average,” he said.
The IGC Grains and Oilseeds Index dropped by about 9 per cent month on month, with the biggest declines noted for wheat, maize, and soyabeans.
Commonwealth Bank analyst Tobin Gorey said the global grain community was in the midst of processing the news coming out of Europe late last week.
“These are big cutbacks,” he said. “The prices are already reasonably high for canola. It means there is going to be less canola supplies in the world, and it’ll affect world supply, and will leave a demand for other oilseeds elsewhere.”
Mr Gorey said Europe’s preference for non-GM canola might limit their options.
“There possibly could be a boom in Australia, particularly for those growing non-GM,” he said.
Australian Oilseeds Federation executive officer Nick Goddard said European grain yields this season were not what farmers were expecting.
“The European climate is great if you’re on holiday, but if you’re trying to grow a crop it’s not so crash hot,” Mr Goddard said.
“Europe has planted an area typical to what they’d normally do to rapeseed, but the yields are expected to not come through.”
Mr Goddard said while Europe was scaling back yield estimations, carry-over stocks from last year would help create a buffer against a possible rapeseed shortage.
While Europe’s grains industry suffers the blow of dry weather, Mr Goddard said it won’t struggle to find sources of canola for import, naming Ukraine as a key provider.
“They’re a good supplier into Europe,” he said.
“The Argentinians are also supplying soyabean oil and biodiesel directly shipped to Europe, so the demand for canola in Europe has fallen back slightly.
“I don’t think Europe will go short of canola as a result of lower production.”
Source - http://www.blackseagrain.net
