Market still unclear about size of drought-hit German wheat crop

HAMBURG (Reuters) - The market is still uncertain about the size of Germany’s drought-damaged wheat crop as harvesting spreads northwards to areas which have suffered most from the dry weather, traders and analysts said on Monday.

FILE PHOTO: A combine harvester reaps winter wheat at a field in Koesching near Ingolstadt July 26, 2012. REUTERS/Michaela Rehle/File Photo

Germany is the European Union’s second largest grain producer after France. Its crops wilted under the hottest spring weather since 1881 and unusually dry weather in June and July.

“I think that roughly half Germany’s wheat crop has now been gathered and we still do not have a clear picture of the likely size,” one German analyst said. “Harvesting is now spreading towards the north and north-east where the results are likely to be the worst, so the bad news could still be on the way.”

German farming association DBV said on Wednesday it could not forecast Germany’s 2018 wheat crops after damage due to dry weather but said the crop would be significantly down on the year.

The association had only on July 5 forecast that Germany’s 2018 winter wheat harvest would fall 15.1 percent from 2017 to 20.5 million tonnes.

“The question is now whether Germany will harvest under 20 million tonnes,” a German grains trader said. “There is a north/south divide with wheat in central and south Germany looking in reasonable condition but the north looking bad.”

“As harvesting moves northwards in the next couple of weeks we should get a clearer picture of the possible national crop total as the areas with the worst drought damage are collected.”

Traders said quality results from wheat areas cut so far were mixed but reasonable in south and central Germany.

“Protein levels are generally all right but test weights are a problem in some areas,” another trader said.

Test weight is an important indicator of how much flour can be extracted from wheat.

Reporting by Michael Hogan, editing by Emelia Sithole-Matarise