Europe heatwave drives grain futures to multi-week highs

Euronext wheat futures hit a three-week high and corn reached a near two-month peak as temperatures topped 40°C across western Europe.zawya
At least 18 people have died in France from the heatwave, with red heat alerts issued across France, Spain, and Italy, according to Reuters.reuters
U.S. consultancy AgResource cut its EU wheat production forecast by more than 2 million tons, warning spring crops like maize face the greatest risk.zawya

Europe Heatwave Pushes Grain Prices to Multi-Week Highs

European grain futures rallied on Monday as a deadly heatwave gripping the continent intensified fears of crop damage in key producing regions, even as U.S. grain markets moved in the opposite direction under pressure from a strong dollar and falling oil prices.

Paris Futures Surge on Supply Fears

September wheat on Paris-based Euronext rose 2.4% to €206.00 per metric ton, hitting a three-week high, while November corn climbed 2.7% to €217.25 per ton, reaching a near two-month peak, according to Reuters. The gains stood in contrast to Chicago Board of Trade wheat, which fell 0.5%, and CBOT corn, which eased 0.1%, highlighting the localized nature of the European supply risk.zawya

Market concerns have centered on corn crops in France and Spain, but with temperatures forecast to remain around 40°C across France for several days and hot conditions spreading into Central Europe, worries about wheat are also mounting. U.S. consultancy AgResource cut its projection for EU wheat production by more than 2 million tons due to the heat, while also anticipating a deterioration in milling quality for the French crop, according to chief economist Bill Tierney.zawya

Record Heat Claims Lives Across Europe

The heatwave has already claimed at least 18 lives in France, Reuters reported on Sunday. Météo-France has placed multiple regions under its highest red heat alert, with temperatures in Bordeaux reaching 41.9°C and Paris expected to hit 41°C by Wednesday. Over 63 million people in France are affected by heat warnings. Red alerts have also been issued in Spain and Italy, while Britain’s Met Office issued a rare red heat warning for parts of England and Wales.reuters

Spring Crops Most Vulnerable

Analysts note that spring-planted crops such as maize face the greatest risk, while winter wheat is nearer to maturity and somewhat less vulnerable. However, a European trader told Reuters that the impact on Germany and Poland “could be pretty unfavourable” if the heat persists. The UK’s Agriculture and Horticulture Development Board noted that European harvest pressure from winter barley had helped cap some gains earlier in the week, but said the heatwave remains “the key watchpoint” for global grain markets.ahdb

An advancing U.S. harvest and favorable crop prospects in Russia and Ukraine have kept Chicago prices subdued, with the dollar index at a one-year high adding further headwinds for dollar-denominated commodities.zawya