A severe heatwave across Europe is causing a rally in grain markets, with futures for both wheat and corn on Euronext in Paris climbing to multi-week highs. The most significant risk is currently for corn, which is in an earlier stage of development. France, a major EU grain producer, is experiencing temperatures exceeding 40°C in several regions.
The Paris corn contract surged by as much as 4.1%, hitting its highest level since June 3, and was trading at €221.25 per tonne, up 3.6%. Wheat futures also rose by up to 2.7%, reaching a three-week high, and were trading at €207 per tonne, up 3%. However, despite these recent gains, European grain prices remain below the highs seen in spring, which were driven by high fertilizer costs and earlier weather concerns. Last week, the French Agriculture Ministry reduced its estimate for corn acreage due to farmers shifting to other crops.
While the market initially focused on corn damage in France and Spain, worries about wheat are emerging as the heatwave is expected to spread into Central Europe, with temperatures around 40°C forecast for several days in France. AgResource has already cut its projection for this year's EU wheat production by over 2 million tons due to the heat, also anticipating a decline in French milling quality. Concerns about crop damage are particularly high for less mature wheat in Germany, Poland, and the Baltic region as the heatwave shifts east.
The heat could severely impact non-irrigated maize fields in France, potentially pushing the country's maize crop below 10 million metric tons for the first time since 1990, compared to 13.2 million tons in 2025. For soft wheat, France's yield could fall below 7.0 tons per hectare, (against 7.4 t/ha in 2025), which would result in production being at least 1 million tons lower than last year's 33.4 million tons. The most exposed areas are those with the best potential, and the continuous heat is accelerating the harvest by a week or two, which is unusual.
Simultaneously, Chicago wheat and corn futures were declining, and soybean prices were largely stable. This divergence is partly due to a firm dollar and falling oil prices impacting the US market, as well as signs of progress in US-Iran talks regarding their conflict, which previously contributed to heightened fertilizer cost concerns that supported European corn prices in April.
