Grain prices rose in August amid weaker harvest prospects and increasing geopolitical tensions. In Europe, corn crops suffered significant losses due to high temperatures.
In the United States, corn yield estimates were also revised downwards. The latest WASDE report put the figure at 178.5 bushels per acre, compared with 180 bushels a month earlier. However, this remains above the Pro Farmer Crop Tour estimate of 173 bushels per acre.
According to the authors of the analysis, the market has already largely priced in the expected reduction in the corn harvest over the past month.
Black Sea and Maritime Logistics Add Further Risks
Additional pressure is coming from the deteriorating security situation along key international trade routes. The report notes that tensions around the Bab el-Mandeb and Strait of Hormuz, as well as risks to oil infrastructure, are already affecting energy markets.
Against this backdrop, Brent crude oil rose to $107 per barrel, according to the figures cited, increasing concerns over inflation and higher transport costs.
The situation in the Black Sea is particularly important for the grain market. Continued attacks on vessels and port infrastructure have made shipments from the region more difficult.
The issue, however, is not so much a global shortage of grain as its geographical distribution and the ability to move available supplies to ports and consumer markets. For this reason, future freight-rate developments could become one of the key factors shaping prices.
Spain Lacks Purchasing Coverage for Early 2027
At the local level, Spain has seen a noticeable decline in demand, particularly in the area influenced by the Port of Tarragona.
At the same time, grain purchases for delivery from January 2027 remain limited. With markets rising and uncertainty remaining high, this could make it more difficult for buyers to secure the necessary coverage.
According to the authors, there were few opportunities during the summer to purchase corn or wheat for delivery from the beginning of next year at prices that appeared attractive to buyers. Now that quotations are rising, covering these positions will become more difficult.
EUDR Adds Uncertainty to Soybean Purchasing
Another source of uncertainty remains the EU Deforestation Regulation (EUDR).
Uncertainty over the timing and practical implementation of the requirements is making it difficult for buyers to arrange soybean purchases for delivery from January 2027.
The report notes that previous delays to the regulation’s implementation have increased caution among market participants and complicated long-term planning.
Low Pig Prices Could Limit Feed Price Increases
Further developments in grain markets will largely depend on oil prices, freight costs and the situation in the Black Sea.
If energy prices continue to rise and logistics risks intensify, more expensive transport could push grain prices higher in importing countries.
At the same time, demand remains a natural constraint on such increases. In particular, if low pig prices continue to fail to cover producers’ costs, this could lead to weaker feed demand in 2027.
Overall, the market has already largely priced in smaller harvests, but geopolitics, energy prices, freight costs and insufficient forward purchasing remain key risk factors for grain quotations in the coming months.
PigUA.info, based on materials from 3tres3.com