July 25, 2019

Wheat cools off despite the heatwave

The 2019 EU wheat and barley harvests are in full swing across Europe with – so far – limited impact from the June’s heatwave in the western part of the continent. The French wheat harvest progress is approaching 50% and a 39+MMT crop is now being discussed with ‘exceptional’ yields reported above the Seine river. The European Commission pegged this year’s EU soft wheat average yield above 6T/ha or 7.3% higher than last year and 1.6% above the 5-year average. The bloc’s (soft) wheat production is set to rebound by more than 10MMT from last year’s devastated harvest and as such, a higher exportable surplus needs to find demand.

However, with fierce competition from the Black Sea – Ukraine and Romania in particular – the 2019/20 marketing season is off to a sluggish start with EU wheat exports totalling less than 600KT ie 27% behind the 5-year average and the lowest in 8 years.
The record-breaking temperatures seen in France will be highly detrimental to spring crops like sunflower or maize which has now entered in its critical flowering period and resulted in record EU maize imports of more than 1.2MMT since July 1st or +556KT vs last year. The French maize ratings are expected to decline for a 4th consecutive week and with irreversible yield damage, the 2019 harvest could be the lowest since 1990.