Corn joins grains set back by Spanish heat

27th Jun 2012, by Agrimoney
Spain joined the list of countries in which dryness worries have spread from winter cereals to spring-sown corn, enhancing expectations for import needs by the European Union's top grain buyer.

The dryness-hit country, which now looks on for a 30% drop in its winter grains production compared with a 25% decline estimated last month, is expected to show a 5% drop in corn sowings too, US farm officials reported.

And the decline, "due to the reduced water availability", would be bigger were it not for a switch from rice on some irrigated ground.

The comments follow concerns lodged by officials in Ukraine, expected to take second rank among world corn exporters in 2011-12, that rain was needed imminently if forecasts of a record harvest this year were to be achieved, besides the dryness limiting expectations for the US harvest.

On Monday, European Union researchers flagged that a "shortage of rainfall could affect the yield potential" of some spring crops, including sunflowers.

Grain imports

Spain's grains harvest, which has a history of volatility, is closely watched in Europe because of its implications for the country's substantial grain imports.

The country typically ranks, for instance, as the top importer of UK feed wheat.

For corn, Spain uses 1m tones in starch-making alone, besides use in making bioethanol, while the grain has been expected "to be the preferred grain in the feed formula in 2012-13", assuming supplies are readily available to import from the likes Bulgaria, France and Ukraine, the US officials said.

France's corn crop has in fact got off to a strong start, with FranceAgriMer last week rating 73% of the crop in "good" or "excellent" condition, up four points in a week, and compared with 64% a year before.

Adverse weather

Spain has already started its harvest of winter grains, which country's farm ministry sees tumbling 27% to 12.27m tonnes, because of persistent dry weather, and some commentators foresee falling even further.

The country's grain and oilseed merchants association has forecast a 32% decline, and the Agro-Food Co-operatives Association a 33% drop.

A return of hotter and drier weather has affected grain formation, including "in those regions where crop projections remained higher", the US officials said.

Durum yields "have recorded the sharpest fall", and have meant some farmers harvesting the pasta grain for fodder, or grazing animals on the crop.

The EU officials forecast a drop of more than one-half in Spanish durum yields, to 1.20 tonnes per hectare.

However, at broker FCStone, commodity risk manager Jaime Nolan Miralles reported some compensation to growers in a "high quality" of what is making it to the market, with "over 90% of output achieving protein levels above 13%.