A decrease in the harvest forecast in the EU leads to an increase in prices for European grain

Against the backdrop of hot weather, Strategie Grains experts lowered the forecast for the European wheat harvest. In the June report, the forecast for the production of soft wheat in the EU in 2023/24 MY was reduced compared to previous estimates by 1.3 million tons to 128.7 million tons, which will exceed the previous season’s figure by 3.6 million tons.

This adjustment is due to the expected reduction in the production of spring cereals due to dry and hot weather in the northern regions of Europe, in particular in the Baltic countries and in the north of Poland.

As a result of the delay in the sowing of corn in Spain, Poland and the north of France, the forecast of its production has been reduced by 0.9 million tons to 61.2 million tons, which will exceed the figure of the previous season by 9 million tons.

The barley harvest forecast was reduced by 2 million tons to 47.9 million tons (3.3 million tons less than the previous season), in particular, the spring barley production estimate was reduced to 19.2 million tons (4.3 million tons less than last year ).

On the Euronext exchange on Friday, the futures for the main agricultural crops rose sharply:

• September wheat futures – by 1.6% to 238.75 €/t (+9.4% since the beginning of June),
• November corn futures – by 1.4% to 236 €/t (+10%),
• September rapeseed futures – by 6.4% to €473.5/t (+19.8%).

No significant precipitation is expected in Europe in the next 7-10 days, so the condition of spring crops, especially corn, will continue to deteriorate, so the upward trend in prices is likely to persist.