EU Commission lowers forecast for the 2015/16 corn crop

The European Commission has further reduced its figure for the expected wheat crop, in its latest estimate of the EU grain balance in 2015/16. At just half a million tons, however, the reduction is almost negligible. 

The 3 million ton cut in the anticipated corn crop to 65.5 million tons is considerable, on the other hand. The International Grains Council had already lowered its forecast at the end of last week, the hot and dry weather in July generating problems for the crops. 

In France, for instance, the proportion of corn plants rated as being in good or excellent condition has plummeted by 22 percentage points in the last four weeks and is now only 59%. In adjusting its figures, the Commission is reacting to the yield estimates already published some days ago by its MARS forecasting unit, which indicate that yields are likely to fall 17% short of the previous year. 

"However, because weather conditions in July, a period which is regarded as key for the later yields, were virtually perfect in the US, expectations of high worldwide supply are weighing on corn prices. The critical reports about the condition of corn plants in the EU are thus lending only limited support to the price in Paris", says Commerzbank. 

There is little in the way of positive impetus for the wheat price in Paris either, which harvest pressure and negative news from overseas are keeping at just over €180 per ton. 

"Although harvesting in Germany and Great Britain was hampered by rain last week, it made good progress in France, and the weather forecasts are generally favourable for this week", added Commerzbank.