Strategie Grains Cuts EU Outlook Again - Forecast Down 10 Million Tons In Past 2 Months

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(Reuters) - French analyst Strategie Grains on Thursday sharply cut its forecast for this year's grains crops in the European Union due to renewed dry conditions in the Western part of the bloc in May and despite recent rainfall. Soft wheat saw the largest reduction, at 6 million tonnes, with the estimate of the 2011 crop lowered to 125.6 million tonnes, now 1 percent below last year's 126.6 million tonnes.

"The springtime drought continued throughout May in West Europe, reaching critical levels in many countries," Strategie Grains wrote in its monthly report.

"Rains arrived at the beginning of June but in most places this was too late to fundamentally alter harvest outlooks, since yield potentials were already irrevocably impacted in France, Britain and Germany," it added.

However, a cut of almost 7 million tonnes to the wheat crop outlook in the west EU was partially offset by a 1 million tonne increase in the forecast for southeast countries and a 400,000 tonne upward revision for Mediterranean countries, it said. Strategie Grains has now cut its outlook for the total EU soft wheat crop by nearly 10 million tonnes in the past two months. The analyst had previously anticipated a rise of as much as 7 percent in soft wheat output.

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