Grain price forecasts. What can you expect in the new season?

Prognozy cen zbóż. Czego można się spodziewać w nowym sezonie?

The total grain harvest is expected to be record-breaking, amounting to 2.312 billion tons, which is 15 million tons more than in the previous season.
The global wheat balance is very tight because wheat stocks among major exporters are the lowest in twelve seasons.
In the first half of the 2024/2025 season, according to the Sparks Polska analyst, a moderate increase in grain prices is possible.
In the second half of the 2024/2025 season, the dynamics of price growth may accelerate.

Our editorial office was one of the media patrons of the event that took place on July 11, 2024 in Sopot, namely the Gdańsk Grain Exchange. We have already described the part of Sabaranski's speech regarding the previous season, now we focus on news and interesting data in the context of the harvest.

Record wheat exports from Russia, huge numbers from Ukraine. All despite the war

Balance of wheat cultivation in the 2024/2025 season

Wojciech Sabaranski presented specific numbers and calculations of forecasting agencies that specialize in assessing the balances of agricultural raw materials. They show that the total grain harvest is expected to be record-breaking, amounting to 2,312 million tons, which is 15 million tons more than in the previous season. As he points out, 1.2 billion tons of it is corn, and almost 800 million tons is wheat. At the same time, global grain stocks are to be at the level of 582 million tons, which, as the analyst emphasized, is 9 million tons less than in the previous season and, importantly, the lowest in ten seasons. Which, according to Sabaranski, shows that global grain production cannot keep up with growing consumption.

At the same time, he notes that the global wheat balance is very tight, because wheat stocks among major exporters have been the lowest for twelve seasons. And world wheat production is expected to be only 2 million more than in the previous season (795 million tons). Countries such as Russia, Ukraine, France and Germany are expected to collect less of this species. As shown in the chart, Australia and Argentina will experience growth.

Slide from the conference
Balance of corn and barley cultivation

Here, Wojciech Sabaranski pointed out at the meeting that he was comfortable on a global scale. He estimated global production at 5 million tons less than in the previous season, i.e. 1,220 million tons. Global stocks at 280 million tons, i.e. 6 million tons less than previously. Lower harvests by over 10%. are expected in Ukraine and by 4 percent. in United States. But in South Africa they are to be higher by almost 20 percent, and in Brazil by 8 percent.

During the Gdańsk Grain Exchange, the analyst also presented a balance sheet regarding the barley market. It turns out that global barley production is to be 5 million tonnes higher than in the previous season, when it amounted to 150 million tonnes. He estimated global stocks at 25 million tonnes, i.e. 2 million tonnes more than previously. In this case, harvests are expected to decline in countries such as the USA, Turkey, Ukraine and Russia, while increases are recorded, for example, in the EU.

Slide from the conference
What are the forecasts for grain prices in the 2024/2025 season?

The analyst divided them into two parts. As he noted, in the first half of the 2024/2025 season, in his opinion, a moderate price increase is possible. This is the result of the fact that we are entering slightly lower price levels than those recorded at the beginning of the previous season. Moreover, as he added, we currently have harvest pressure in the Northern Hemisphere, which means high wheat harvests in the USA and it is still unknown how corn will yield. The harvest in Russia is important, but we can already see what will happen in the EU. There will be a decline in France, Germany and Poland, but an increase is recorded in Romania, Bulgaria and Spain.

Sabaranski also noted that greater competition in exports will be very important for the first half of the season due to the ban on wheat imports until October 15 introduced by Turkey.

What about the second half of the season? Here, the Sparks analyst also provided his data.

– In the second half of the 2024/2025 season, it is possible to accelerate the dynamics of price growth – he said.

Because he expects balance sheet stress to be more visible. In addition, there is a lot of talk about the La Nina phenomenon, i.e. weather problems in South America and thus a possible correction of corn harvests in Brazil and Argentina. In his opinion, Russia is still in the game and possible restrictions on wheat exports from this country, which may also affect prices.