Dry Weather in Spain and Southeast Europe Affecting Wheat and Barley Production

The dry weather conditions in Spain and southeast Europe are posing challenges for wheat and barley production, leading to a less favorable harvest outlook than previously anticipated.

According to the monthly report by Strategie Grains, a French agricultural consultancy, European soft wheat production is now projected to reach 126.2 million metric tons, which is a decrease of 2.5 million tons compared to last month’s assessment. Despite this decrease, the projected production figure for this year is still one million tons higher than the previous year. However, this decrease in production is primarily attributed to the dryness experienced in Spain, where crop production is severely affected.

The barley outlook has also been revised downward by Strategie Grains to 47.1 million tons from 51.3 million tons last year. “The barley harvesting in Spain has commenced, but as predicted, yields are extremely low due to the historical drought,” the consultancy stated. It further highlighted that excessive humidity in southern Europe has exacerbated the production challenges.

On the other hand, corn production is expected to increase this year to 60.8 million tons, compared to 52.1 million tons the previous year when the crops were devastated by drought in France and Germany. However, Strategie Grains cautioned that this forecasted figure might also be at risk unless there is substantial rainfall in July.

Furthermore, the report suggested that Ukrainian and Brazilian corn could provide stiff competition for European sources, keeping prices relatively low. Additionally, French wheat prices are expected to decline, closing the gap with Russian and Ukrainian wheat offers.

In conclusion, the dry weather conditions experienced in Spain and southeast Europe have severely impacted wheat and barley production, leading to a downward revision in the harvest outlook. The report further highlights potential challenges in corn production unless significant rainfall occurs. This situation also presents an opportunity for Ukrainian and Brazilian corn to compete with European sources and potentially lower prices. French wheat prices are also expected to decrease, narrowing the price gap with Russian and Ukrainian wheat offers.