The European Commission raised forecasts for wheat and rapeseed production in 2023/24 MY, which increased the pressure on quotations

Increased EU wheat and canola production forecasts in FY 2023/24 increase pressure on prices, but are supported by lower crop forecasts for North African countries.

Compared to previous estimates, the European Commission has increased production forecasts for 2023/24 MR:

• soft wheat - by 1.7 to 132.5 million tons, which will exceed last year's 126 million tons by 5.2% and by 5.8% - the average 5-year indicator - 125.3 million tons,
• 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 reduced:

• corn - by 200 thousand tons to 64.4 million tons, which will exceed last year's 52.2 million tons by 23%,
• barley - by 200 thousand tons to 52.4 million tons, which will correspond to last year's level,
• of soybeans - by 0.1 to 2.82 million tons, which will exceed last year's 2.44 million tons by 15.5% and by 6% - the average 5-year indicator.

The forecast for sunflower production in the EU was left at 10.5 million tons, which would be 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 the main agricultural crops fell in price:

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

The MARS agency has lowered its harvest forecasts in the Maghreb countries (North Africa) due to a long drought, which will increase the demand for European grain in the new season, lead to political and economic instability in the region, increase food prices and import dependence.

The Maghreb region, which includes Algeria, Morocco, Tunisia and Libya, is currently experiencing its worst drought since the beginning of the century.

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

In Algeria, the worst drought in the last 40 years will reduce wheat production to 1.78 million tons and yield to 1.28 tons/ha, which will be 4% and 24% below the 5-year average, respectively. Barley production will be 26% lower than the average and will amount to 1.08 million tons, and the yield will be 1.06 tons/ha (-14%).

In Tunisia, wheat production will decrease to 837,000 tons, which is 33% less than last year's 1.25 million tons and 28% less than the 5-year average, and the yield will decrease to 1.62 tons/ha (-33% for the year, - 19% on average over 5 years). Barley production will amount to 225,000 tons, which will be 57% and 56% lower than last year's and the average 5-year indicators, respectively.

As a result, the Maghreb countries will be forced to import a record 25.1 million tons of wheat and barley in 2023/24, which will have a negative impact on the countries' economies.