Wheat prices are rising against the backdrop of reduced crop forecasts in the EU due to a lack of rainfall

The increase in grain prices on the European exchange, caused by the European Commission’s extension of the ban on wheat, rape, corn and sunseed supplies from Ukraine to 5 neighboring EU countries, accelerated against the background of dry and hot weather in France and Germany in recent weeks.

Analysts of Refinitiv Commodities Research, due to the long-term deficit of precipitation in most of Europe, compared to previous estimates, reduced the forecast for the production of soft wheat in the EU in 2023/24 MY by 0.8 million tons to 130.4 million tons, which will exceed last year’s 125.7 million tons. At the same time, the durum wheat production forecast was reduced by 200,000 tons to 7.6 million tons (7.1 million tons last year).

According to satellite images, as a result of dry weather in some countries, in particular in Germany, there is a decrease in the density of crops.

At the same time, in the south of Europe, especially in Italy, intense rainfall has had a beneficial effect on wheat crops, although experts emphasize the need for more rain.

Quotations on the Paris Euronext rose sharply again yesterday:

• September wheat futures – by 2% to €232.5/t (+5.3% for the week),
• November corn futures – by 1.6% to €225.75/t (+5.9%),
• September rapeseed futures – by 1.4% to €426.75/t (+6.8%).

In general, since the beginning of the week, grain quotations have increased by 5.3-6.8%, which improved the mood of farmers who expected a further decrease in prices.

In the coming weeks, warm and humid weather is expected in most agricultural regions of Europe, which is favorable for crops in the later stages of development.

Tags: EU, prices, France, wheat, Germany