European Wheat Market: Weather, Productivity, and Prices Drive Volatility

The European wheat market is in the midst of a dynamic period, shaped by the interplay between shifting productivity estimates, volatile weather patterns, and tightening supply prospects for the 2025 marketing season. The European Commission’s latest forecast marks a notable increase in average wheat productivity, especially in Southern Europe, with the average yield projection raised from 5.83 to 5.88 tonnes per hectare. Yet, despite this improvement, yields remain below last year’s 6.02 tonnes per hectare, and total EU wheat output is expected to decline from 125.6 million tonnes to 121.9 million tonnes.

The worrisome backdrop is the adverse conditions prevailing in major northern producers such as France, Germany, and Poland, where ongoing weather challenges threaten to cap supply. These factors, coupled with ongoing demand, have already nudged prices upward, with Paris futures reaching $0.27 per kg. Traders and market watchers now eye the skies as near-term price movements will hinge on whether negative weather persists or relief arrives in key northern regions. With global wheat stocks generally tightening and the balance of risks skewed to the upside, market participants are advised to remain vigilant and agile as the summer unfolds.

📈 Wheat Prices: Latest Exchange Quotes

Exchange/Location	Type	Protein	Delivery Terms	Latest Price (EUR/kg)	Previous Price (EUR/kg)	Update Date	Sentiment
Paris Euronext (FR)	Wheat	min. 11.00%	FOB	0.26	0.27	2025-06-20	Neutral
CBOT (US)	Wheat	min. 11.50%	FOB	0.22	0.22	2025-06-20	Steady
Ukraine (Kyiv, FCA)	Wheat	min. 11.50%	FCA	0.24	0.24	2025-06-20	Stable
Ukraine (Odesa, FCA)	Wheat	min. 11.50%	FCA	0.25	0.25	2025-06-20	Stable
Ukraine (Odesa, FOB)	Wheat	min. 12.50%	FOB	0.20	0.21	2025-06-20	Weakening
Ukraine (Odesa, FCA)	Wheat	min. 9.50%	FCA	0.23	0.24	2025-06-20	Soft
Ukraine (Kyiv, FCA)	Wheat	min. 9.50%	FCA	0.22	0.23	2025-06-20	Soft

🌍 Supply & Demand Dynamics

• European Outlook: The EU’s wheat yield is revised up to 5.88 t/ha for 2025, though still lower than 2024’s 6.02 t/ha.
• Production Forecast: Total EU wheat output is seen falling to 121.9 million tonnes (down from 125.6m tonnes), driven by weather-related setbacks in France, Germany, and Poland.
• Offsetting Regions: Yield gains in Southern Europe help partially compensate for losses in the north.
• Global Picture: Tight stocks among major exporters and steady import demand from North Africa and the Middle East add further support to prices.

📊 Fundamental Data & Market Drivers

• USDA Reports: Recent USDA WASDE data corroborates tightening global stocks, adding upward sentiment.
• Speculative Positioning: Funds have reduced short positions on major exchanges, reflecting heightened weather risks.
• Other Grains: Maize and barley productivity also revised upward, but these are not enough to offset total grain supply pressure.
• Trade Flows: Ukrainian export offers remain stable; French and Black Sea FOB values edge lower yet are underpinned by risk premiums.

🌦️ Weather Outlook: Key Regions

• Northern Europe (France, Germany, Poland): Persistent rainfall and below-average temperatures disrupt harvesting and may further reduce yields; watch for potential disease issues.
• Southern Europe (Spain, Italy, Greece): Favorable, warmer, and drier weather underpin rebound in productivity, especially in late-developing crop areas.
• Black Sea (Ukraine, Russia): Forecasts show near-normal to dry conditions, supportive for harvest completion but putting late crops at some moisture risk.

📉 Global Production & Stock Comparison

Region/Country	2025 Output (m t)	2024 Output (m t)	Trend
EU	121.9	125.6	Declining
Russia	88.0*	89.6*	Stable/Down
Ukraine	21.0*	22.2*	Stable/Down
US	50.0*	49.4*	Stable/Up
Australia	28.9*	30.8*	Declining

*Latest available estimates from USDA/Analyst consensus

📆 Trading Outlook & Recommendations

• Monitor: Track weather developments in northern EU through July. Persistent wet or cold risks could spur further price gains.
• Hedgers: Consider locking in margins for 2025/26 sales if prices continue to break above recent resistance.
• Buyers: Cover spot and short-term requirements; consider waiting for pullbacks before extending forward coverage.
• Speculators: Upside bias persists, but volatility is expected. Use options for risk management.

⏩ 3-Day Price Forecast (Paris Euronext, CBOT, Ukraine)

Exchange	Current Price (EUR/kg)	Forecast (3-Day)	Direction
Paris Euronext	0.26	0.26 – 0.275	Firm/Bullish
CBOT	0.22	0.22 – 0.23	Sideways to Firm
Ukraine FCA	0.24 – 0.25	0.25 – 0.26	Firm

Near-term, the market remains highly sensitive to European weather headlines and crop monitoring updates. Price risk remains to the upside should conditions worsen in northern Europe.