There was a bit of a ripple on the futures markets last trading session. Stratégie Grains yesterday released its yield forecast for grain in the EU. The wet autumn causes shifts in what growers sow, according to the agency. The import of grain from Ukraine, among other things, remains a sore point for Europe. There must be guarantees that the products are shipped, several MEPs say.
The March wheat contract on the Matif closed €0,50 lower at €222,25 per tonne. On the CBoT, wheat showed a modest plus, rising 0,4% to $6.12½ per bushel. Corn showed a slightly bigger gain than wheat, closing 0,6% higher at $4.72½ per bushel. Soy took a step back, losing 0,8% to settle at $12.97¼ per bushel.
The French market agency Stratégie Grains estimates the wheat harvest in the EU for the 2024/25 season at 124,8 million tons. That is 1,1 million tons below the harvest in the 2023/24 season when 125,9 million tons of wheat were threshed. Stratégie Grains predicts higher yields for barley and corn in the coming harvest. The yield estimate for barley is 52,7 million tonnes compared to 47,3 in 2023/24 and maize at 63,5 million tonnes compared to 61,3 million tonnes last harvest. The larger barley harvest is related to the wet autumn. Farmers are therefore forced to sow more spring barley. The total grain yield in the EU for the coming harvest is estimated by Stratégie Grains at 277,8 million tons. That was 268,4 million tons last harvest.
The final stock of wheat for the current season is relatively large according to the market office. This is due to the large influx of grain from Ukraine that was subsequently not transported further to third countries. The slowdown in transit is again a result of fierce competition with grain from Russia. For the 2024/25 season, Stratégie Grains expects demand for feed grain to increase. Demand for human consumption and industrial applications will recover, but will remain below pre-war levels in Ukraine.
Trade barriers
The EU's removal of trade restrictions on agricultural goods from Ukraine is coming under pressure. Last fall, five eastern member states imposed unilateral import bans on grain, among other things, much to the dismay of Brussels. The group of member states including Poland and Hungary ultimately did not bow to the pressure from the European Commission and ultimately got their way more or less. There are also grumblings about imports from Ukraine in other European countries. 22 MEPs have sent a letter to the Commission calling for limits on imports. The signatories include Bert-Jan Ruisen (SGP/ECR) and Annie Schreijer-Pierik (CDA/EPP).
They emphasize that they stand behind the Ukrainian people and will continue to support Ukraine as best they can. However, some sectors within agriculture are disproportionately affected by this support for Ukraine, the parliamentarians say. Sugar, grains, oil seeds, poultry meat and eggs are affected by the large flow of products from Ukraine. Stability in these sectors is shaking and the survival of companies is at risk. Ukrainian products that were intended for third countries now almost exclusively come to the EU. In addition, there are major differences in production standards between Ukraine and the EU, which means there is no level playing field.
In the letter, the parliamentarians call for guaranteeing the transit of Ukrainian products to third countries. This not only benefits the EU, but also Ukraine in the long term. Otherwise, the country will become very dependent on the EU, it sounds.