Weather in Western Europe remains the main factor influencing agricultural quotes

Weather conditions in Western Europe remain a major factor influencing global agricultural markets. After a wave of extreme heat and drought last week, rainfall in the region brought down temperatures and partially limited the negative impact on crops. However, a third heat wave is expected in France and Spain this week, which could further reduce the yield potential of spring crops.

The high temperatures have had the biggest impact on corn crops in France, the EU’s largest grain producer. According to state agency FranceAgriMer, as of June 29, the share of winter soft wheat crops in good to excellent condition fell from 74% to 68% in a week, compared to 67% on the same date last year.

The condition of spring barley crops deteriorated from 63% to 61% compared to 68% last year, while the most dramatic deterioration was recorded for corn – the share of crops in good and excellent condition collapsed from 76% to 58% compared to 76% a year earlier.

High temperatures have also significantly accelerated the ripening of grain crops in France, so the harvest rate is well ahead of the multi-year average. As of June 29, French farmers had threshed 26% of the area under soft winter wheat against the five-year average of 5%, 55% of the area under winter durum wheat against 17%, 83% of the area under winter barley against 39% and 21% of the area against 6% respectively.

A sharp deterioration in the condition of corn crops in France has been a powerful factor supporting stock market quotes. August corn futures on the Euronext exchange in Paris have risen by 10% in the past two weeks to €235/t or $268/t, reaching their highest level in the past two years.

This week, a heatwave will first hit the UK before moving to France and Germany. Meanwhile, an atmospheric front in western and northern Europe will remain a key factor in the formation of occasional showers and thunderstorms over the next few days.

In the US, heavy rains have swept through the Midwest following a heat wave last week, bringing some relief to temperatures and reducing stress on corn and soybean crops. Warm temperatures are expected to remain over the next seven days, but precipitation is expected to increase, generally supporting crop growth in the US corn belt.

Temperatures remain warm in the eastern Central and Southern Plains of the United States, while precipitation is unevenly distributed. This poses risks for some areas where soybean, corn, and spring wheat crops could be affected by the heat. More precipitation is forecast, but its impact will depend on the amount and evenness of the distribution.

Heavy rainfall continues in the Northern Plains of the United States and the Canadian Prairies, with moderate temperatures, generally improving the condition of spring crops. However, in the Canadian province of Manitoba, rainfall has been excessive, causing flooding in some areas.

Black Sea region

In the Black Sea region, weather conditions remain generally favorable, although there are local problems with harvesting. Several atmospheric systems will pass through the region over the coming week, bringing new periods of precipitation.

Cooler weather arrived in Ukraine last week, easing the stress after five days of heat. At the same time, the high temperatures that preceded it accelerated the ripening of winter barley and allowed for its harvesting to be intensified.

This week, Ukraine is expected to experience cool weather for July, with temperatures ranging from 12 to 25°C and occasional rain. The rains are already halting harvests in some regions, and the low temperatures for this period remain unfavorable for the development of corn, which requires a higher amount of active temperatures and is already lagging behind in development.

The previous heat wave accelerated the ripening of winter wheat and barley, so precipitation at this stage practically does not improve the yield potential of these crops, but rather delays harvesting and can negatively affect grain quality.

In the winter wheat growing zone in the Russian Federation, hot weather contributes to the rapid ripening of crops. At the same time, due to fuel shortages and periodic precipitation, the harvesting rate is lagging behind the optimal one, which creates the risk of partial crop losses.

Australia

South-east Australia has seen another series of good rains, continuing to improve the condition of winter wheat, canola and barley crops. Drier weather is forecast this week, but overall conditions for crop development remain favourable despite the onset of an El Niño.

The influence of El Niño on weather patterns in Australia typically increases over the next few months, so the main risks to the crop may arise later, as winter crops enter the key stages of grain formation and filling.

Tags: Australia, Ukraine, EU, France, Black Sea region, USA, crop condition