The Commission now estimates production of common wheat, or soft wheat, this season at 114.6 million tonnes, down from 116.1 million predicted a month ago and nine per cent below last year’s crop.

It is also the lowest volume since 2012/13, bringing the Commission into line with other recent forecasts of the EU’s main cereal crop.

The EU harvest has been dented in particular by the smallest crop in France in 40 years, as well as a sharp fall in German production as the bloc’s two biggest wheat growers endured repeated heavy rain in the past year.

In monthly supply and demand data, the Commission increased its projection of EU soft wheat imports in 2024/25 by one million tonnes to seven million but left unchanged its soft wheat export forecast for this season at 26 million tonnes.

It lowered its forecast for 2024/25 usable production of maize in the EU to 60.1 million tonnes from 61.6 million in late August, now four per cent below last season’s level.

Maize crops, harvesting of which is under way, have been hurt by summer drought and heatwaves in the east of the bloc.

Estimated EU barley production in 2024/25 was also revised down, to 50.4 million tonnes from 51.3 million a month ago, though that was six per cent above last year’s drought-hit crop.

In oilseeds, the Commission lowered its estimate of the bloc’s rapeseed output this season to 17.2 million tonnes from 18.0 million, nearly 13 per cent below last year’s level.

For sunflower seed, which has also suffered from drought in eastern Europe, the Commission cut its production forecast to 9.5 million tonnes from 9.9 million, three per cent below the previous crop.

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Heavy rain since autumn is expected to have reduced sharply wheat planting in France, Germany and Britain, and the damp end to winter has raised doubts over whether farmers will be able to switch as much as area as anticipated to spring barley.

“We have already lost some wheat volumes in France, Germany and Britain,” Maxence Devillers, an analyst with Argus, said. “But the worst may be behind us and the weather forecast for the next two weeks could help improve things.”

Weather charts showed relatively dry conditions in the week ahead in Germany and Britain though parts of France may stay wet.

In France, spring barley sowing has hardly advanced in the past month, while for earlier-sown wheat conditions are at their worst in four years, according to farm office FranceAgriMer.

A drying out of fields could lead French farmers to extend spring barley planting beyond the optimal window that ends in mid-March, while persisting wetness would lead them to transfer some area to later-sown maize and sunflower, Devillers said.

In Britain, parts of southern England experienced their wettest February on record.

The Agriculture and Horticulture Development Board (AHDB) late last year estimated Britain’s wheat area would fall three per cent this year and spring barley area would jump 11 per cent, but the agency is doing a follow-up survey to re-assess the impact of heavy rain.

However, rain in Europe has varied within countries, with some zones are benefiting from moisture after drought in the past two years, while mild temperatures have spared crops from frost damage, according to analysts.

“Overall, the spring sowing is going pretty well in Germany nationally, with problems concentrated in some northern regions,” one German analyst said.

Weak prices for maize could favour planting of other spring crops.

“For spring sowings in Germany I would expect increased plantings of spring wheat and malting barley,” the local analyst said.

In Poland, where wet conditions may delay slightly the start of spring planting in most regions, maize could also lose out, said Wojtek Sabaranski of analysts Sparks Polska.

“Due to a deep slide in maize prices this season, the area planted to maize this spring is likely to considerably decline, in favour of such grains as oats and barley, as the supply of these grains has been tight, and prices paid high,” he said.

Elsewhere, winter rain has proved beneficial for crops by easing drought in Spain, Romania and Bulgaria, though moisture levels remained low in the east of Romania and Bulgaria, Argus’ Devillers said.

–Reporting for Reuters by Gus Trompiz in Paris, Michael Hogan in Hamburg and Nigel Hunt in London.

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The Commission said it would extend the suspension of import duties on Ukrainian exports for another year to June 2025. They were originally suspended in 2022 to support Ukraine’s economy following the Russian invasion, which has hit shipments via the traditional Black Sea route.

The Commission proposal, which will require approval from EU governments and the European Parliament, introduces an “emergency brake” for the most sensitive products – poultry, eggs and sugar – allowing tariffs if imports exceed the average levels of 2022 and 2023.

It also allows the Commission to impose measures if the markets of one or more EU members are disrupted by a surge of imports of other farm produce, such as grains. In critical cases, these could be in place 21 days after a request is made.

Ukraine’s EU neighbours – Bulgaria, Hungary, Poland, Romania and Slovakia – have complained that the farm imports have upset their markets, leading to protests by farmers and truckers.

Ukrainian Prime Minister Denys Shmyhal welcomed the proposed extension and expressed hope that the controls would avoid future conflicts.

“We also expect that the measures developed will remove harmful unilateral bans on the import of our agricultural products from Poland, Slovakia and Hungary,” he said in a post on Telegram messenger.

With polls pointing to gains by the far-right in European Parliament elections in June, French President Emmanuel Macron, also called on Tuesday for clear measures on Ukrainian imports. French farmers have been protesting for more than two weeks over rising costs and cheap food imports.

Arnaud Rousseau, head of France’s main farmers’ union FNSEA, said the Commission was acting “woefully” late, that controls were required immediately and that the emergency brake limits should be set at 2022 levels.

EU sugar imports from Ukraine rose 1,000% in 2023, while egg imports more than doubled and poultry imports were 50% higher.

Philippe Gelin, head of France’s largest poultry group LDC LOUP.PA, also called the reference dates, including 2023, problematic.

French and Belgian farmers set up dozens of blockades on highways and on access roads to a container port on Wednesday, a day before an EU summit.

The Commission also proposed exempting EU farmers for 2024 from a requirement to keep a minimum share of their land fallow while still receiving EU farm support payments.

Farmers could instead grow nitrogen-fixing crops such as lentils or peas or catch crops that grow between plantings of a main crop, without applying plant protection products.

The Commission has also proposed to renew for a year the duty suspension for imports from Moldova until July 2025.

–Additional reporting for Reuters by Yuliia Dysa in Kyiv, Gus Trompiz, Sybille de La Hamaide in Paris.

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Although highly pathogenic avian influenza (HPAI), commonly called bird flu, is harmless in food, its spread is a concern for governments and the poultry industry due to the devastation it can cause to flocks and a risk of human transmission.

The virus usually strikes during autumn and winter and has been spreading in many European countries over the past weeks but with a delay compared with previous years.

A increase in outbreaks had previously been observed at the beginning of October, whereas this year the rise has only taken place from November, the European Food Safety Authority (EFSA), the European Centre for Disease Prevention and Control (ECDC), and the EU reference laboratory (EURL) said in a joint report.

“The later rise in HPAI virus detections in wild birds may be due to a later autumn migration of several wild waterbird species following a relatively warm autumn period,” they added.

The report notes that the severe bird flu virus was detected in wild birds and mammals in the Antarctic region for the first time.

Meanwhile, ECDC assessed that the risk of bird flu infection in Europe remains low for the general public. Despite indications of mammal-to-mammal transmission, no mammal-to-human transmission of the H5N1 virus in circulation in Europe has been observed, they added.

It was too early to predict whether a similarly high number of bird flu outbreaks as in the previous years or a reduction due to development of some level of immunity in previously affected wild bird species would be observed, they also said.

–Reporting for Reuters by Sybille de La Hamaide.

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“Listening to the meteorologists this morning, they pretty much threw in the towel on any moisture for the dry areas of the Midwest for the next two weeks,” Marex Capital analyst Charlie Sernatinger said in a note to clients.

Chicago Board of Trade December corn futures, which track the crop being grown in fields across the United States, were up 31-1/4 cents a bushel at $6.28-3/4 (all figures US$). The contract hit its highest since Nov. 1 during the session.

CBOT November soybeans were 34-1/4 cents higher at $13.77 a bushel after rising to $13.78, the highest peak for the new-crop contract since March 8.

“Given the situation around the Corn Belt it now seems highly unlikely that the USDA’s yield estimate will be achievable,” Summit Commodity Brokerage said in a research note. “If we stay dry, it will be hard for this market to do anything but work higher.”

CBOT September soft red winter wheat futures gained 39-1/2 cents to $7.48-1/4 a bushel. The most-active wheat contract hit its highest on a continuous basis since Feb. 24.

The U.S. Agriculture Department cut its good-to-excellent ratings for the U.S. corn and soybean crops by more than expected on Tuesday afternoon, including steep drops in top-producing states Iowa and Illinois.

Concern is also mounting about crops elsewhere, including Europe.

The European Union’s crop monitoring service MARS on Monday reduced nearly all its average yield forecasts for this year’s grain and oilseed crops in the bloc, citing adverse weather conditions.

— Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Matthew Chye in Singapore and Sybille de La Hamaide in Paris.

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“It’s hard to have a real solid opinion of whether we’ll go up or go down, because you could easily make a case either way,” said analyst Mike Jubinville, of MarketsFarm.

“Is there room to go (lower)? absolutely,” Jubinville said, adding “are we oversold and due for a bounce? Absolutely.”

Canola has lost about 45 per cent from its highs of the past year, with similar losses seen in Chicago soyoil, said Jubinville. However, he noted European rapeseed is down by 61 per cent from its own highs. While canola is usually the leader in the relationship with European rapeseed, the past six months has been the other way around and Jubinville thought the weakness in rapeseed could leave canola open to more downside as well.

Looking at the weekly chart, Jubinville expected the July canola contract that settled at $649.50 per tonne on Wednesday could easily drop into the $500 per tonne area. On the other side, a correction to the 20- or 50-day moving averages would see prices move back above $700 but would still leave the market in a long-term downtrend.

Crush margins are off their highs of the past year but remain attractive from the processor’s perspective, which should remain supportive, although Jubinville said there was increasing competition from other oilseeds in the export market.

With expectations for large crops already being priced into the markets, “if we fall short in any way, then we have room for a bounce,” said Jubinville.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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The EU executive arm said that during that period, Ukrainian wheat, maize, rapeseed and sunflower seed can be sold to any other of country of the 27-nation bloc, except to the five countries, which had complained the cheaper Ukrainian grain was making domestic production unprofitable.

The EU had earlier liberalized all imports from Ukraine to help the country’s efforts to fend off the Russian invasion. The five countries became transit routes for Ukrainian grain that could not be exported through the country’s Black Sea ports because of the war.

“The products can continue to circulate in or transit via these five member states by means of a common customs transit procedure or go to a country or territory outside the EU,” the Commission said.

With the Commission restrictions in place, Bulgaria, Hungary, Poland and Slovakia agreed to lift their unilateral bans for entry of Ukrainian wheat, maize, rapeseed and sunflower seed they had imposed earlier to protect their farmers.

The Commission’s measures also include a support package worth 100 million euros (C$149.95 million) for local farmers in the most affected five EU countries.

The Commission, which is responsible for trade policy in the European Union, said it could extend the grain import restrictions beyond June 5 if exceptional conditions continue.

— Reporting for Reuters by Jan Strupczewski.

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Romania has stopped short of enforcing a ban, whereas Poland, Hungary, Bulgaria and Slovakia took unilateral steps to protect local markets from a flow of Ukrainian farm products.

With access to its own Black Sea ports blocked and later limited by Russia’s invasion, Ukraine, one of the world’s leading grain exporters has had to find alternative shipping routes through neighbouring states.

Millions of tons of grains and oilseeds, cheaper than those produced in the European Union and exempt from customs tax, ended up in central and eastern Europe, with local farmers complaining demand and prices of local products were distorted.

Earlier this month, the European Commission said it would take emergency “preventive measures” for wheat, maize, sunflower seeds and rapeseed, compensating local farmers and only allowing grain to enter the five countries from Ukraine if they were set for export to other EU members or the rest of the world.

Daea said the Commission’s measures were conditioned by states’ withdrawing their unilateral bans. If an agreement won’t be reached, Daea said the Commission will move to ban exports specifically to Romania.

“Negotiations with the states are still ongoing,” Daea told reporters after meetings in Brussels and Luxembourg.

“Romania will be protected through a European Commission decision, and … will receive compensation for farmers.”

The European Union’s agriculture chief expressed optimism on Tuesday that countries neighbouring Ukraine will shortly accept a deal to allow Ukrainian grain to enter their countries for export elsewhere.

— Reporting for Reuters by Luiza Ilie in Bucharest.

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In USDA’s Global Agricultural Information Network (GAIN) report released Wednesday, the attaché pegged the EU’s 2023-24 grain production at 284.7 million tonnes, 17.9 million more than this year’s crop which was hampered by drought.

Initial crop conditions were deemed favourable across the EU, according to the report, while also noting that rains will be needed to replenish soil moisture in Portugal, Spain and western France. Russia’s invasion of Ukraine and rising food prices caused “a stagnation of grain demand” but the larger production will reduce imports by eight million tonnes, to 27.4 million.

The total seeded area is slated to increase by 330,000 hectares to 51.4 million, while ending stocks in 2023-24 are projected to be 31.3 million tonnes, 1.5 million more than in 2022-23.

Wheat production in the EU is expected to rise 3.5 million tonnes to 137.8 million, largely in part due to higher production in France, Bulgaria, Hungary, Romania, Italy and Baltic nations.

Corn production will surge by 12.2 million tonnes to 64.4 million in 2023-24 despite a 170,000-hectare drop in area to 8.7 million. Barley production will also rise to 53 million tonnes in 2023-24 compared to the 51.5 million expected this year. Oat production will decline by 130,000 tonnes, to 7.5 million.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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The heat is mounting on Brussels to work out a European Union wide solution after Warsaw and Budapest announced bans on some imports from Ukraine at the weekend, with other countries in eastern Europe saying they are also considering action.

Farmers say imports from Ukraine have lowered prices and reduced their sales. In Poland, the issue has created a problem in an election year for the ruling nationalist Law and Justice (PiS) party that relies on rural areas for much of its support.

“Ukraine needs help, but the costs of this help should be spread over all European countries, not just the frontline countries, especially Poland. We do not agree to this, because it harms our farmers,” Polish agriculture minister Robert Telus said after talks that began in Warsaw on Monday.

Kyiv said it aims to re-open food and grain transit via Poland as “a first step” to ending import bans, but Telus said that no solution had so far been found to guarantee that the grain in transit would not end up on the local market.

Some Black Sea ports were blocked after Russia’s invasion of Ukraine began last year and logistical bottlenecks trapped large quantities of Ukrainian grain, which is cheaper than that produced in the EU, in central European countries.

The Polish, Hungarian and Slovakian export and transit bans come as a deal to allow the export of millions of tonnes of Ukrainian grain via the Black Sea, despite the Ukraine war, nears its May 18 expiry. Meanwhile, Russian demands have left the prospect of an extension of this deal uncertain.

The combined impact of the bans and failure to agree an extension would strand millions of tonnes of grain inside Ukraine, a major agricultural producer that makes a substantial part of its gross domestic product from food sales.

“The first step … should be the opening of transit, because it is quite important and it is the thing that should be done unconditionally and after that we will talk about other things,” Ukrainian Agriculture Minister Mykola Solsky said before the talks in Warsaw.

To prevent any grain entering its market, Poland’s ban also covered transit through the country, which imported 2.45 million tonnes of grain, or three quarters of total imports, from Ukraine in 2022, Polish agriculture ministry data showed.

The bans have left truck drivers stranded for several days in long traffic jams on the border baffled.

“We can’t go in either direction. Yes, the Poles reached out to us, I’m very thankful to them. I’m immensely grateful, the whole of Ukraine is, the whole world even. But now, Poland doesn’t let (us) in for some reason,” Mykola Bervin, a driver from Zhytomyr in Ukraine, told Reuters.

Bervin said he had been stuck for three days and the tailback was more than 25 kilometres long.

EU action ‘inevitable’

Slovakia approved halting imports indefinitely following Poland’s move, although it maintained transit, while the BTA news agency reported that Bulgaria’s agriculture minister also said the country could limit imports.

Istvan Nagy, Hungary’s farm minister, said a solution was needed beyond the national level, calling eventual EU measures inevitable. The Czech Republic also urged an EU-wide solution while saying it would not introduce a ban itself for now.

Bulgaria, Hungary, Poland, Romania and Slovakia raised the issue with the European Commission last month, saying tariffs on Ukrainian imports should be considered, while states have also pushed for an EU purchase mechanism to buy up cheap grain.

Telus said that six countries would like to meet with the EU commissioner responsible for trade to find a solution.

A senior EU official said EU envoys would discuss Poland and Hungary’s bans on Wednesday – after the bloc’s executive said on Sunday that unilateral action was unacceptable.

The official said low global prices and demand meant grain was staying in the bloc rather than being sold on.

— Reporting by Pavel Polityuk in Kyiv, Andriy Perun in Rava-Ruska and Pawel Florkiewicz and Anna Koper in Warsaw, Gabriela Baczynska in Brussels, Boldizsar Gyori in Budapest, and Jan Lopatka in Prague; writing by Tom Balmforth, Jason Hovet and Anna Wlodarczak-Semczuk.

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