What does a tight EU wheat balance mean for UK prices?

Last week, the EU Commission updated its forecast for grain and oilseed production in the region for the 2025/26 season.

Wheat production across the EU-27 (including durum wheat) is now estimated at 134.6 Mt, an increase of 0.3 Mt on the previous projection. Estimated EU wheat exports remained unchanged at 30.7 Mt. The increase in production, combined with an increase in expected carry-in stocks, saw ending stocks of wheat in 2025/26 forecast at 10.2 Mt, up from 9.6 Mt last month. However, this is still 13.6 % lower than the figures for 2024/25.

To help us make clearer comparisons of the EU wheat balance in the 2025/26 season versus historical data, we can look at a stocks-to-use-ratio. To calculate this ratio, we divide ending stocks by domestic consumption and exports, expressing the result as a percentage. Currently, the 2025/26 forecasts suggest a third year of a tightening balance, with ending stocks back 39% on the previous four-year average.

Despite the forecast increase in wheat production in the EU in 2025/26, as discussed above, the supply and demand balance in the EU in the coming season is expected to tighten. Consequently, market participants will be paying close attention to any adverse weather conditions affecting the EU’s wheat balance.

Given the significant influence of Paris milling wheat futures on UK domestic feed wheat futures, should we see significant change to yield potential in the EU over the coming weeks as crops continue to develop, we could see some support in European markets filtering through to UK prices.

However, improving weather conditions as of late, the approaching wheat harvesting campaign and the high level of net short positions held by investment Funds in Paris milling wheat futures are currently putting pressure on prices. Also, longer term, it’s important to consider that plentiful grain supplies from other major exporters will limit any upwards potential in European grain prices.

Tags: prices, Production, wheat, forecast, stocks, futures, durum wheat, exports, grain, EU, UK