Global grain markets react slowly to EU harvest forecast cut
Wheat prices remain under pressure despite the EU’s revised harvest forecast, as global grain markets respond more to improved growing conditions elsewhere and ongoing trade tensions. A strong euro is adding further downward momentum to prices, raising concerns for European exporters.
The global pressure on prices has several causes. The drought still affecting parts of Europe is somewhat misleading. In many wheat-producing regions around the world, growing conditions have actually improved due to rainfall, typically leading to higher harvest forecasts.
Europe’s harvest outlook lowered
Europe is a different story. The European Commission has lowered its forecast for the 2025 wheat harvest. In March, Brussels estimated the soft wheat harvest at 126.5 million tons. This forecast has been reduced by 200,000 tons to 126.3 million tons. The global market has not responded noticeably to this adjustment.
Trade tensions and currency pressure
Another factor weighing on prices is the trade tension between the United States and the rest of the world, which is undermining market confidence. A third reason for falling wheat prices is the strong euro relative to the dollar. The euro-dollar exchange rate has risen above $1.13, which is unfavourable for the EU.
