EU wheat exports for the 2024/25 season are forecast to hit their lowest level in three years. As the world’s second-largest wheat exporter, the EU's reduced output will push key importing countries to seek alternative suppliers. The decline is primarily due to a smaller wheat crop, which is projected to shrink by 5% compared to the previous year, driven by a reduced harvested area.

The European Commission’s latest cereals market report, published on August 29, estimates total EU grain production for the 2024-25 season at 264.5 million tonnes, a decrease of 7.1 million tonnes compared to July. This production level is 5.9% below the five-year trimmed average and 2% lower than the previous year.

Soft wheat production is expected to reach 116 million tonnes, a 7.5% drop from the last season and an 8.4% decline compared to the five-year average. Durum wheat production is projected at 6.9 million tonnes, down 7.3% from the five-year average. The Commission also forecasts barley production at 51.3 million tonnes and maize production at 61.6 million tonnes, 7.7% below the five-year average for the 27 EU member states.

FRENCH WHEAT OUTPUT FALLS TO 40-YEAR LOW

In its August World Agricultural Supply and Demand Estimates (WASDE) report, the USDA cut its estimate for EU wheat production by 2 million tonnes, bringing the total to 128 million tonnes—the lowest since the 2020/21 season. Prolonged heavy rains in France, the EU’s largest wheat producer, have lowered both yield prospects and wheat quality. French wheat production is forecast to fall by 20% compared to last year, reaching its lowest level in nearly four decades. The drop in exportable supplies is further exacerbated by lower carryover stocks in the region. Adverse weather in France has also diminished grain quality, reducing the availability of milling wheat. However, the greater supply of feed-quality wheat, combined with a smaller corn crop, is expected to fuel strong demand for wheat as animal feed. The EU’s feed and residual use forecast was raised by 1.5 million tonnes in August, bringing the total to 46 million tonnes.

The reduced harvest prospects for EU grains have resulted in higher wheat export quotes from France over the past month, with quotes currently about 10 percent higher relative to key competitor Russia and continuing to rise. The EU, Russia, and Ukraine have traditionally had lower priced exports and shipped to price-conscious importers in the Middle East, Africa, and Asia. Despite smaller crops in Russia and Ukraine, exports from these origins are expected to remain strong as prices are competitive compared to EU quotes. “The EU will likely lose market share in some of its top markets, including Morocco, Algeria, Nigeria, and Egypt. Furthermore, with favorable crop prospects in Canada and United States, the EU will face additional competition in top market China,” USDA noted.