French wheat harvest underway as market weighs weather toll

wheat 

French farmers have started harvesting this year's wheat crop early after a recent heatwave, as traders await a clearer picture of weather damage in the European Union's biggest grain producer.


A steep cut by consultancy Strategie Grains to its French soft wheat production forecast a week ago, attributed to heavy rain this year, has rattled the market, adding to concern about parched northern European grain belts.

By July 1, farmers had harvested 3 percent of the soft wheat crop area, farming agency FranceAgriMer said on Friday in a weekly crop report.

This was an earlier than usual start, although slightly behind the 5 percent progress seen at the same date last year, when hot June weather also accelerated crop development.

FranceAgriMer estimated that 73 percent of soft wheat crops were in good or excellent condition by July 1, down slightly from 74 percent a week earlier.

The good/excellent score for soft wheat has declined from 80 percent at the end of May, although the drop is much less dramatic than in 2016 when late spring weather turned a promising crop into the worst in three decades.

Some market participants argue the modest decline in FranceAgriMer's crop ratings suggest Strategie Grains' forecast of 33.2 million tonnes, well below last year's production of36.6 million, is too pessimistic.

Most observers are expecting some impact from torrentialrain at the end of spring but say it is too early to assess.

Soufflet, one of France's largest grain handlers, has observed in first wheat batches a sharp decline of around one tonne per hectare compared with last year, Francois Berson, head of grain procurement, said in a harvest update posted on thegroup's website on Friday.

That would be a similar yield decrease to that projected by Strategie Grains. However, Berson stressed Soufflet had only received around 40,000 tonnes out of nearly 1 million tonnes of wheat it expects to take in.

Early quality readings for wheat were reasonable, with satisfactory protein levels tending towards 11.5 percent, Berson  added.

Harvesting of winter barley was 76 percent complete, up from 23 percent a week earlier and ahead of 56 percent progress a year ago, FranceAgriMer said.

Soufflet said it was seeing a drop in winter barley yields of around 10 percent versus last year, but with very varied results depending on soil types and with good grain quality.

Spring barley harvesting was also under way, with 4 percent of the area harvested, according to FranceAgriMer.

Soufflet had yet to receive any spring barley, Berson said.

An advancing rapeseed harvest was showing an average yield drop of around 30 percent from last year, he said, supporting falling expectations among forecasters.