EU Raises Wheat and Rapeseed Production Forecasts

Higher forecasts for wheat and rapeseed production in the EU in 2023/24 MY increase pressure on prices, but they are supported by lower crop forecasts for North Africa.

Compared to the previous estimates, the European Commission raised the production forecasts for 2023/24 MY:

• soft wheat – by 1.7 to 132.5 mln tonnes, which is 5.2% higher than last year’s 126 mln tonnes and 5.8% higher than the 5-year average of 125.3 mln tonnes
• rapeseed – by 0.2 to 20.2 million tons, which is 3.6% higher than last year’s 19.5 million tons and 17.2% higher than the 5-year average.

At the same time, production estimates were lowered:

• corn – by 200 thousand tons to 64.4 million tons, which is 23% higher than last year’s 52.2 million tons
• barley – by 200 thousand tons to 52.4 million tons, which will correspond to last year’s level,
• soybeans – by 0.1 to 2.82 million tons, which is 15.5% higher than last year’s 2.44 million tons and 6% higher than the 5-year average.
• sunflower – production in the EU was left at 10.5 million tons, which is 16.7% higher than last year’s 9 million tons and 8.1% higher than the 5-year average.

After a long weekend on the stock exchange in Paris, the futures of major crops fell:

• September wheat futures – by 2.5% to the lowest level since October 2021 at 220.25 €/t
• November corn futures – by 2% to 215 €/t,
• August futures for rapeseed – by 4.7% to the lowest level since April 2021 – 385 €/t.

Maghreb Countries

The Agency MARS due to prolonged drought has lowered crop forecasts in the Maghreb countries (North Africa), which will increase demand for European grain in the new season, leading to political and economic instability in the region, increase food prices and dependence on imports.

The Maghreb region, which includes Algeria, Morocco, Tunisia, and Libya, is experiencing the worst drought in its history.

Morocco

In Morocco, the heat accelerated the ripening of wheat and barley, which reduced their yields. According to MARS forecast, the wheat harvest in the country will amount to 3.6 mln tons, which is 34% higher than last year, when there was also a drought, but 25% lower than the 5-year average of 4.83 mln tons. At the same time, the yield will decline by 10% to 1.48 t/ha compared to the average. The barley harvest will reach 1.12 million tons, which is 60% higher than last year and 31% lower than the 5-year average, and the yield will be 0.99 t/ha (-18% compared to the average).

Algeria

In Algeria, the most severe drought in 40 years will reduce wheat production to 1.78 million tons and yield to 1.28 t/ha, which is 45% and 24% below the 5-year average, respectively. Barley production will be 26% lower than average at 1.08 mln tons and yield 1.06 t/ha (-14%).

Tunisia

In Tunisia, the wheat production will decrease to 837 thsd tonnes, which is 33% lower than last year’s 1.25 mln tonnes and 28% lower than the 5-year average, and the yield will decrease to 1.62 t/ha (-33% for the year, -19% on average for 5 years). Barley production will amount to 225 thsd tonnes, down 57% and 56%, respectively, compared to last year and the 5-year average.

As a result, the Maghreb countries in 2023/24 MY will be forced to import a record 25.1 mln tonnes of wheat and barley, which will negatively affect their economies.

Source: Graintrade

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