Europe’s wheat fields are facing diverging weather in the heart of the growing season.
Parts of the Black Sea region and European Union faced dry spells throughout spring, hurting yield forecasts in the key exporters. Now rains are beginning to relieve crops in southern Russia and Ukraine, but dryness is persisting in western Europe.
Weather in the coming month will be crucial for crops and help shape export supplies for the new season. Russia is expected to reclaim its ranking as the top shipper — after falling behind the EU this season — though recent showers likely won’t be enough to offset some of the crop damage and analysts have cut their harvest outlook.
“Everybody is fully focused on the forecasts at this stage,” said James Bolesworth, director at U.K.-based adviser CRM AgriCommodities. “It’s likely we’ll see wheat prices remain range-bound until there’s more certainty over yields.”
“Notable” soil moisture improvement in Russia’s North Caucasus region has eased stress on winter-wheat in recent days, and there’s further rain ahead, according to forecaster Maxar. Showers will also relieve dryness in the eastern EU, though drought is expanding in France, the U.K. and western Germany.
Black Sea Forecasts
Ukraine’s weather center and Russian consultant IKAR recently lowered harvest outlooks. Conditions in the southern Russian region of Stravopol, a key grower, remain a “disaster,” Andrey Sizov Jr., managing director at SovEcon, said on Twitter this week.
Wheat futures traded higher in Chicago and Paris on Wednesday, but remain well below peaks seen in recent months. Russia’s late rains should aid crops, while the French harvest may shrink at least 13% from last year, Commerzbank analyst Michaela Helbing-Kuhl said in a note.
“Water stress persists and the weather forecasts leave little hope in the short term,” Paris-based adviser Agritel said in a note.
(Bloomberg)