Late frost in May followed by a severe draught and lately heavy rainfalls and inundations have deteriorated prospects of a good crop in parts of Europe. The European Commission (EC) downgraded wheat and barley production forecasts this week. EC’s forecasts for European soft wheat were set at 138.86m tons, which is still higher than last year’s 134.36m tons. Also other industry groups like the International Grains Council (IGC) and Strategie Grains cut their estimates for soft wheat to 140.8m or 140.0m respectively.
EU barley crop forecasts were also downgraded by the EC by 2.47m tons to 57.0m tons, even below last year’s figure of 59.6m tons. This caused prices of spring barley, which is mainly used for brewing purposes to hike on Friday with merchants and cooperatives still absent from the selling side as Nils Krage, managing director at GrainCom reported on Friday.
In the meantime, harvesting of winter barley has commenced with yields a bit below the 5-year average. Calibration and low moisture levels were satisfying but high to very high protein levels disappointed.
At the beginning of the week European wheat prices fell mainly based on euro's rise to a more than nine-month high against the U.S. dollar, which hampered the competitiveness of European wheat on world markets.
As the crop throughout Europe advances, the picture will become clearer where the rollercoaster ride of wheat and barley prices will end this year.