EU wheat exports in 2024/25 are forecast at the lowest level in three years, according to a recent USDA FAS report on world grain markets. As the second largest global wheat exporter, key importing markets will need to turn to alternative suppliers. 

The primary driver is a smaller wheat crop, which is down 5% from the prior year on smaller harvested area. Notably, in key exporter France, wheat production is anticipated to be down 20% from the prior year to the lowest level in almost four decades. 

Exportable supplies are further tightened given the lower carry-in stocks in the region.

Prolonged weather-related issues in France have also reduced grain quality, reducing the amount of milling wheat available. With greater availability of feed-quality wheat and a smaller corn crop, the demand for wheat feed use within the EU is expected to remain strong. EU feed and residual use is forecast up 1.5 million tons this month to 46.0 million.

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% 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 favourable crop prospects in Canada and United States, the EU will face additional competition in top market China.