Wheat harvest revised upward in Australia and the EU

Grain prices moved lower overall in the last trading session. The European Commission raised its forecast for the EU wheat harvest, while Abares increased its outlook for the Australian crop. Rain is forecast for parts of the US prairies. Market participants are also keeping a close eye on developments in Iran. The March contract for wheat on the Matif closed €4.50 lower at €192.75 per tonne. On the CBoT, wheat lost 5½ cents to $5.66¾ per bushel. Corn closed 2½ cents lower at $4.31¾ per bushel. Soybeans followed the same trend as the grains, but the loss is slightly smaller at 1¼ cents, closing at $11.54½ per bushel. Occasionally, there is a rise in the wheat market. However, the story about ample supplies in the world quickly comes back to dominate. This is the case again now. The European Commission this week raised its wheat production forecast for the EU for the 2025/26 marketing year (harvest year 2025) by 2.2 million tonnes compared to last month’s forecast, to 134.4 million tonnes. Thus, the harvest is 9.2% above the five-year average. For the upcoming harvest, the European Commission expects the wheat area to come in slightly below average. In most EU member states, slightly less wheat has been sown, the Commission expects based on data from Eurostat and specialists. France is the exception, where more wheat has been sown. According to the European Commission, the corn area will drop to a historically low level. The total barley area is growing compared to last year but still remains below average. More winter barley has been sown, especially in France, Germany, and Hungary. There is much less demand for summer barley, with the smallest area likely being sown in 35 years. Positive news in AustraliaIn Australia, the wheat harvest has also been revised upward. The Australian Bureau of Statistics Abares calculated a wheat harvest of 35.6 million tonnes in December. This has now been raised to 36.0 million tonnes. Last year, Australian growers harvested 34.1 million tonnes of wheat. In the US, it is mainly the weather reports that are putting pressure on prices. Rain is forecast for the prairies, which are currently dry and would welcome precipitation. Some analysts see a small risk that some weather models predict colder weather for the second half of March. If the wheat takes root now due to relatively mild weather and serious cold follows later, it could cause damage according to some local sources. GuaranteesIn the grain market, we cannot completely ignore the developments in the Middle East. The Iranian Revolutionary Guard claims to have control over the Strait of Hormuz, an important passage for oil and gas exports from the Middle East. Meanwhile, the Trump administration is working to open the strait. Trump is reportedly focusing on insuring maritime trade through the strait and plans to deploy the US Navy to ensure a safe passage for merchant shipping. This news has kept oil prices relatively stable, and according to some analysts, it is affecting other commodities. Other geopolitical news includes a meeting between China and the US in Paris. Delegations led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng will meet in the French capital to discuss trade and investment agreements, including tariffs, investments, soybeans, and rare earth metals, as reported by the South China Morning Post on Wednesday. This summit is in preparation for Trump's visit to China, scheduled for March 31 to April 2.