EU Grain Production Forecast Declines Amid Drought Woes

The European Union's grain production is expected to decline year-on-year for the 2026/27 season, according to a report by Sunsirs. The USDA Foreign Agricultural Service (FAS) attributed this decline to adverse weather conditions, particularly drought in major producing countries such as France, Hungary, Poland, and Germany.

The EU's corn yields are anticipated to drop sharply due to the drought, with key producers like France and Germany being hit hard. This expected tightening of corn supplies will support stronger spot prices, while futures markets may trend upward, bolstered by expectations of supply contraction.

The region is also a significant global wheat exporter, and drought conditions have led to forecasts of lower wheat yields in major producing nations. The anticipated reduction in wheat supplies for 2026/27 favors spot prices and provides upward support for futures prices.