Bloomberg News

EU's Corn Outlook Reduced by Offre & Demande on Heat Wave

July 31, 2012

The European Union corn harvest will be smaller than previously expected after a heat wave cut yield potential in Italy and southeastern Europe, according to Offre & Demande Agricole, France’s largest farm adviser.

The outlook for EU corn production was cut to 60.4 million metric tons, from an earlier forecast for the crop to be little changed from last year at 65 million tons, said Lucile Brazzini, corn analyst at Offre & Demande in Bourges, France.

Temperatures in a stretch of southern Europe from eastern Italy across to Romania reached 35 degrees Celsius (95 degrees Fahrenheit) or more this month, about 5 degrees Celsius above normal, data from the U.S. Department of Agriculture show. Heat stress can reduce corn yields.

“The yield potential has deteriorated in the past weeks with the very strong heat,” Brazzini said by phone. “We’ve cut in Italy, Romania, Hungary and also some of the smaller countries in central Europe.”

The outlook compares with last week’s forecast by the International Grains Council for a corn crop of 65.7 million tons, and a June 29 estimate by the EU for production of 66.8 million tons and consumption of 71.1 million tons.

“Our corn balance is super tight,” Brazzini said. “Seeing that the world balance is even tighter, finding the corn elsewhere is not going to be obvious.”

The outlook for France’s corn harvest is improving due to warm weather after months of rain delayed corn development, the analyst said. Offre & Demande is forecasting a French corn yield of 8.9 tons per hectare (2.47 acres) from 10 tons in 2011.

“Last year was an exceptional year,” Brazzini said. “We still have quite a bit of delay. The heat allows for a bit of catch-up and also increased the potential yield, if it continues like this we could raise it.”

Temperatures are expected to climb to 35 degrees Celsius in France’s southwest tomorrow and 34 degrees in the Alsace corn- growing region, according to forecaster Meteo-France.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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