Extremely dry weather in Australia, southern Europe and the U.S. northern Plains could mark the end of record-large wheat crops worldwide, says Reuters. Analysts expect the Australian wheat crop will be markedly smaller than the government forecasts while grain production in Italy and parts of Spain could be the smallest in at least 20 years.
The EU is one of the world’s leading wheat growers and the trading bloc expects a large crop this year, with output in the north, especially in ag powerhouse France, masking the impact of drought in the south. The drought has propelled European wheat futures up by 6 percent since early June, said the news agency. Olive production in Italy could plummet by 60 percent. Spain also is expected to see a smaller olive crop.
Australia’s largest wheat areas, its east and west coasts, have seen less than half the average rainfall for April through June. An analyst for grain trader Nidera said “it’s probably too late in some areas for rain to make any difference.” Last week, the USDA lowered its estimate of Australia’s wheat crop by 6 percent to 23.5 million tonnes. That would be 11.6 million tonnes smaller than the previous crop. Australia usually is the world’s fourth- or fifth-largest wheat exporter, so a small crop would force its traditional customers, such as Indonesia and South Korea, to look for another supplier.