EU Drought Sets Stage for Bullish 2027 Grain Markets

Global grain markets are poised for a potentially bullish 2027 as supply concerns build due to reduced corn and wheat production in the European Union. Senior Market Adviser Naomi Blohm predicts higher grain prices in Q1 2027, driven by strong export demand, particularly from China. The US is expected to produce a record crop, but this could be offset if Brazil and Argentina fail to deliver strong crops.

Blohm emphasizes the need for farmers to clear old crop corn before harvest, with a two-billion-bushel carryout still needing to move before new crop arrives. She suggests reownership strategies, such as call option reownership on the corn market going out into March, which could cover up to 30 cents. This approach would provide flexibility in case the marketplace continues to run higher.

The upcoming WASDE report will be closely watched by analysts for potential adjustments across multiple categories. Blohm sees strong export demand as a positive factor, with China's continued soybean purchases adding another bullish element. However, reduced corn and wheat production in the European Union could tighten global carryouts significantly.