European wheat crops may be heading for another big harvest after a mild winter sped up plant growth and left fields in good condition.
Crops are about two weeks ahead of normal pace in France and are in mostly good condition in Germany and the U.K. after escaping damage from cold this winter. As long as weather doesn’t damage plants in the coming months, the speedy progress may signal an early start to harvests. Prospects are “promising” for developing crops this year, the European Union said on Monday.
Another bumper European wheat harvest would add to grain oversupplies following a surge in production across much of the Northern Hemisphere in the last two seasons. Wheat prices are near five-year lows in the U.S., France and Russia, cutting profits for farmers and eroding revenue for companies including equipment manufacturer Deere & Co. and fertilizer supplier Dow Chemical Co.
“The signs right now for European crops are quite good,” Stefan Vogel, head of agricultural commodities research at Rabobank International, said by phone last week from London. “The forecasts don’t call for any severe frosts. There could still be something happening in April, but in general, it looks right now like a lot of the crops are in pretty good condition.”
The European Commission forecasts wheat stockpiles will reach an eight-year high in mid-2017 amid sluggish export demand. It expects the bloc’s next soft-wheat harvest to fall 5.5 percent to 142.4 million metric tons, after previous crops benefited from large yields and an expanded area.
Crops are generally in “good shape” after fewer frosts than normal in February and March, while moisture remained ample, the EU’s Monitoring Agricultural Resources unit said in a report on Monday.
In France, the EU’s top wheat grower, 92 percent of crops were in good or very good condition as of March 14, according to FranceAgriMer. Almost half of soft wheat had developed 1 centimeter (0.4 inch) of grain ears, the stage that indicates the start of spring growth, compared with 17 percent by the same time last year.
German grain and rapeseed crops survived winter without significant damage after snow helped protect dormant plants from cold in January, according to Berlin-based farmers group DRV. Virtually all U.K. wheat is expected to survive winter, crop consultant ADAS U.K. estimates.
Romania’s harvest may also start early, said Viktor Korobko, director general of Veles-Agro Brokers, a Ukrainian brokerage company that recently expanded into Romania. While photos suggest plants are in good condition, farmers say yields may be slightly lower than last year, he said.
Polish crops haven’t fared so well, with about 10 percent of wheat in the EU’s fourth-biggest grower damaged from a January freeze, Jakub Olipra, an economist at Credit Agricole Bank Polska in Warsaw, said in an e-mailed note. Farmers are replanting damaged fields with spring varieties, which tend to yield less, Olipra said.
European farmers normally start collecting winter wheat in June and July. A harvest a week or 10 days ahead of normal may create a storage crunch for farmers who still have grain to sell from the previous season, said Antoine Liagre, an analyst at French farm adviser Offre & Demande Agricole. While colder temperatures in recent weeks slowed growth a bit, most fields remain ahead of the normal development pace, he said.
“Conditions in April, May and June will be the determinant for final yields,” Liagre said. “Generally the crops are in good condition and advanced. Last year we had something similar, and we had exceptional yields."