European Commission forecasts sharply lower wheat harvest

The growing season is going reasonably well in large parts of Europe. Nevertheless, the European Commission expects the coming wheat harvest in the EU to be more than 6% lower than last season. High fertilizer prices are an incentive for Russian producers to increase capacity. There is only no capacity for that, reports the Russian news agency Tass. You would expect Trump to be busy enough with the war against Iran, but today he is hosting an event for the agricultural sector at the White House. The May contract for wheat on Matif closed yesterday €1.25 higher at €205.25 per tonne. On the CBoT, wheat closed the last trading session 7¼ cent higher at $6.05 per bushel. Corn moved mainly sideways and ultimately ended with a small loss of ¼ cent at $4.67 per bushel. Soybeans gained 2 cent to $11.73¾ per bushel. The European Commission estimates the soft wheat harvest in the EU for harvest year 2026 at 125.9 million tonnes. That would make the harvest 6.2% lower than in 2025, when 134.2 million tonnes of wheat were harvested. If the estimate proves correct, this season’s wheat harvest will be 0.6% below the five-year average. With this estimate, the European Commission is slightly more cautious than Strategie Grains and Coceral, which earlier this month estimated the harvest at 128.5 and 128.8 million tonnes respectively. The IGC calculated a total wheat harvest, including durum, of 137.5 million tonnes compared with 133.7 million tonnes from the European Commission. The smaller harvest is partly due to a smaller wheat area that was sown. In addition, yields per hectare were very high last season. In its estimate for the coming harvest, the European Commission is for now assuming that yields this season will be somewhat lower. In contrast to France and Australia earlier this week, Ukraine does not expect the unrest in the Middle East to have much influence on farmers’ planting plans this year. If fertilizer remains expensive, it will probably only really have an effect next season, says Ukrainian state secretary Taras Vysotskiy to Reuters. An eventual impact on the corn area is expected to become noticeable no earlier than in 2027. This year it is unlikely because everything is already prepared for sowing. Russia has large gas reserves and a sizeable fertilizer industry. Russia only does not have the capacity to further increase production, the Russian news agency Tass reports. The plants are running at about full capacity, said Andrei Guryev of the industry association for fertilizer producers to Tass. To protect domestic agriculture, Russia announced earlier this week that it is suspending exports of ammonium nitrate (Kas) until 21 April. Not pretty News about the war in Iran continues to occupy minds on the commodity markets. Yesterday, US President Trump wrote in a message on his social media channel Truth Social that Iranian negotiators should get serious quickly before it is too late, because once that happens, there is no turning back and it will not be pretty. This message came after Iran brushed aside an earlier American proposal for a deal and came up with a counterproposal that would, among other things, give Iran control over the Strait of Hormuz. Several Gulf states have joined forces and issued a statement condemning Iran’s attacks on oil installations. In addition, the states said they are prepared to defend themselves if necessary. At the White House, Trump is holding an event for the agricultural sector today (Friday 27 March). Hundreds of farmers, ranchers and others involved have been invited to the gathering, which will put the agricultural sector in the spotlight. Trump is expected to announce his plans for the blending percentages of biofuels in gasoline and diesel during this event. Not only corn and soybean growers are looking forward to this. Oil companies are also keeping a close eye on it; they have argued against further raising the renewable fuel standard. Due to the relatively high oil prices, their argument that gasoline would therefore become more expensive no longer holds. Dry zone expands Besides the political maneuvering, the weather also has some influence on the grains market. It is dry in the important US wheat regions. According to the latest drought monitor, 57% of winter wheat is affected by drought. Last week that was 55% and this week last year it stood at 38%. Relatively warm weather forecast for the coming week, with quite a lot of wind, does not improve growing conditions. The drought is not limited to the prairies, it is also relatively dry in the corn belt and the south. Crops such as soybeans, corn and cotton still need to be sown for a significant part.