Grain boosts resilience in food and energy

The USDA's WASDE report had a particularly strong impact on the maize market. Wheat found some support from lower US yield expectations, but larger global stocks weighed on sentiment in the futures market. In Germany, wheat conditions are slightly better than a month ago, according to the latest figures from the DRV. The German association of cooperatives is placing strong emphasis on developing new export markets and strengthening the role of grain in energy supply.The September wheat contract on Euronext Matif closed €0.50 lower yesterday at €203 per tonne. On the CBOT, wheat finished down ¾ cent at $5.86¾ per bushel. Maize recorded a larger decline, falling 7¼ cents or 1.7% to $4.11¾ per bushel. Soybeans lost 8 cents, ending at $11.15 per bushel.The USDA's World Agricultural Supply and Demand Estimates (WASDE) report was arguably the most significant development of the past day. For wheat, analysts viewed the June edition as neutral to mildly supportive. Compared with the May report, the USDA reduced its estimate for the US wheat harvest. It is the first time since 2014 that the June wheat production forecast has been revised downwards.The expected harvested area was left unchanged, but yields were reduced. For Kansas, the largest winter wheat-producing state, the yield forecast was cut by 2 bushels per acre to 35 bushels per acre (approximately 2.35 tonnes per hectare).Near-Ideal Growing Conditions in RussiaThe total wheat supply available for the 2026/27 season (opening stocks plus production) is estimated by the USDA at 1.1 billion tonnes. This is 1.7 million tonnes higher than in the May WASDE report.Wheat crops in Russia, Turkey and Ukraine are performing better than previously expected. In Russia, weather conditions are close to ideal, including above-average rainfall for winter wheat, according to the USDA.However, the USDA expects less spring wheat to have been sown in Russia. Total Russian wheat production has been increased by 2 million tonnes to 88 million tonnes. While growing conditions in the Black Sea region are favourable, production forecasts for Australia and Pakistan have been revised downwards.Global wheat consumption has been increased by 1.4 million tonnes to 824.6 million tonnes. Consumption is therefore expected to exceed production, which is forecast at 820.1 million tonnes. Compared with May, global ending wheat stocks have been raised by 400,000 tonnes to 275.4 million tonnes.Larger Maize StocksFor soybeans, the WASDE report was broadly neutral, while for maize it was considered neutral to bearish. Global soybean ending stocks for the 2026/27 season remained virtually unchanged at 124.9 million tonnes.Argentina's soybean harvest for 2025/26 was increased by 2 million tonnes to 50 million tonnes, resulting in higher opening stocks for the 2026/27 season. A smaller expected global harvest in 2026/27 combined with stronger anticipated demand means ending stocks are only 100,000 tonnes higher than in the previous forecast.Global maize ending stocks for the 2025/26 season were increased by 6.4 million tonnes to 303.4 million tonnes. Larger crops are expected in countries including Argentina, Brazil and India. Ending maize stocks for 2026/27 were increased by 4 million tonnes to 281.2 million tonnes. In a Reuters poll, traders had anticipated an increase of approximately 1 million tonnes.Exports Provide a Boost for German Grain GrowersThe German Association of Cooperatives (DRV) yesterday released its forecast for the German harvest. DRV expects a total German grain harvest of 44.1 million tonnes and 4.2 million tonnes of rapeseed. Wheat production is forecast at 22.63 million tonnes, which is 2.2% lower than last summer despite a 1.4% increase in planted area.Compared with the May forecast, the wheat harvest estimate is 60,000 tonnes higher. According to DRV, crops have benefited from the rainfall received in recent weeks.DRV has praised the efforts of the German Ministry of Agriculture to improve access to international markets for German agricultural products. The opening of the Indonesian market to German wheat is a major success following years of negotiations. With an import requirement of around eleven million tonnes of wheat, Indonesia is one of the largest buyers on the global market, writes Guido Seedler, DRV's grain market expert. According to Seedler, the next major objective is opening the Chinese market to German barley and wheat. A visit by German Agriculture Minister Alois Rainer next week could provide fresh momentum to these efforts.In addition to exports, DRV is also calling for clear policies regarding agricultural products for energy production. The future of biogas plants is of particular importance to German farmers, many of whom face the expiry of subsidy schemes. The future lies in biomethane, says Seedler. It can be used flexibly, strengthens regional energy supply and creates added value in rural areas.Policymakers must therefore set a clear course. Strengthening domestic grain production means strengthening Germany's resilience in both the food and energy sectors. This should be a strategic objective of the federal government, according to Seedler. Only with clear long-term prospects will the German grain industry remain a strong pillar of our food security.