Analysis Grains
Wet weather has limited impact in yield forecast
The JRC confirmed in the May edition of the Mars bulletin that it is wet in our regions. That will not come as a surprise to most readers. What is striking, however, is that the challenging growing season has only limited influence on the expected crop yields according to the JRC. India is heading towards above-average rainfall in the upcoming rainy season. This could provide a boost to agricultural production there.
The September contract for wheat on the Matif rose by €7.75 to €269 per ton yesterday. The Chicago exchange was closed yesterday due to Memorial Day.
Rain and waterlogging, the growing season is not going smoothly in the Benelux, Northern France, Southwest Germany, the UK, Ireland, and Northern Italy. This is once again confirmed in the May edition of the JRC's Mars bulletin, the scientific agency of the European Commission. Planting of spring crops in this region is delayed. The winter cereals are not in great condition due to the wet conditions. Especially the root system of the plants is underdeveloped and the availability of nutrients is mediocre according to the JRC. With rising temperatures and persistent moisture, disease pressure is high. This problem is exacerbated because farmers can hardly access the fields with sprayers.
Further south and east of the EU, farmers are facing a water shortage. In East Germany, Poland, and Southern Italy, the precipitation deficit is increasing. The cereals have survived the winter well there, but now around flowering and grain filling, the potentially good yield is threatened by a lack of moisture.
Above-average yield
With significant areas facing problems, you might expect the JRC to be cautious with the yield forecast. This is not the case. The average wheat yield remains unchanged compared to the April edition of the Mars at 5.71 tons per hectare. According to the JRC, 5.60 tons were harvested last year, and the five-year average stands at 5.65 tons per hectare. So, we are heading towards an above-average harvest.
Perhaps the most striking prediction is the potato yield. The JRC estimates the harvest at 36.8 tons per hectare, 4% above the five-year average. Belgium leads with an expected yield 5% higher, despite all the waterlogging. Critical remarks could be made about this.
Rainy season
The Indian meteorological institute expects more rain than average in the upcoming monsoon. Over the last fifty years, an average of 870 millimeters fell during the four-month season starting in June. The weather institute expects that 106% of that precipitation amount will fall in the coming months. Adequate rain during the monsoon is essential for Indian agriculture. Approximately 70% of the water needed for crop growth and for replenishing irrigation reservoirs falls in these months.
If the prediction is correct and there is enough rain in the coming months, it can boost crop yields in India. A good harvest and thus an adequate food supply can reduce inflation according to experts. Last year, India received less rain than average, resulting in reduced crop yields. To control prices in the domestic market, the Indian government imposed export restrictions on wheat, sugar, rice, and onions, among others.
