Europe’s Wilted Wheat Leaves World Hunting Elsewhere for Grain

(Bloomberg) -- As harvests roll out across Europe, a season of droughts and floods have proven their toll on the continent’s wheat crop.

Farmers in France are pulling in one of the smallest soft-wheat crops in recent memory, with harvests in Romania also battered by poor weather. Even as Russia’s output rises, the mixed bag in a major breadbasket has tightened early-season supplies in the global market.

While the world should still have ample grain, that will leave some buyers looking to alternate shippers, following a season that saw the European Union dominate global wheat sales. The market will also be banking on later-harvested Southern Hemisphere crops more than usual.

“The world has to look for wheat somewhere other than the EU,” said Rory Deverell, commodity risk manager at StoneX. “The burden of responsibility to supply the world with wheat will fall on the shoulders of somebody else.”

Here’s a breakdown of harvest progress across the region:

French Falls

With harvest wrapping up, the EU’s top wheat grower is set for one of its weakest crops this century. Paris-based adviser Agritel predicts France’s soft-wheat output in 2020 will slip by a quarter, from a year earlier, to 29.2 million tons because of too much rain during autumn plantings and not enough for spring growth. Good quality is expected even with the slump in yields, said French cooperative Axereal. Weather was even worse for nearby U.K. farms. Output there will likely fall more than a third to about 10 million tons, flipping the nation back to an importer this season, said Peter Collier, market analyst at CRM AgriCommodities.

Russia Rebounds

Wheat heavyweight Russia is on track to reap its second-biggest crop, despite dryness hurting fields in the fertile southern regions. Scorching heat in Siberia has also reined in estimates, with spring-wheat fields still a few weeks from harvest. For now, most analyst outlooks are converging near 77 to 79 million tons, topping the prior season and relieving some of the EU shortfall. Early-season shipments remain off to a slow start, running 14% below last year.

Rough Romania Season

Normally one of Europe’s top exporters, a severe drought shriveled Romania’s grain fields and a bout of heavy rain at harvest added to the woes. The nation’s agriculture ministry sees the wheat crop at the smallest since 2012. That limits the surplus to be sold abroad, and sales in Egypt tenders have been scant early this season. While less severe, Ukraine’s crop also suffered some setbacks from dry spells.

Germany Steady

Harvests in northern Europe are less far along, and late-season showers boosted German crops after a dry spring, according to agricultural cooperatives group DRV. It upped its wheat forecast to 22.5 million tons in mid-July, slightly below 2019. Recent rains also boosted Polish and Baltic farms, with yields expected near average, according to the EU’s crop-monitoring unit.

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