Drought and frosts have taken a historic toll on the U.S. winter wheat crop, now a heat wave is raising concerns about crop conditions in Western Europe. It’s worthy of attention.
In its WASDE reports, the USDA divides the globe into 13 regions. The European Union plus other countries in Europe produced more wheat than any other grouping in the 2025/26 crop year. Groupings that include the countries that comprise the former Soviet Union and South Asia trail slightly behind Europe in terms of overall production due to their large amounts of arable land, while European countries largely rely on their world-class yields to keep production high. That means growing conditions and mild weather are even more crucial for the continent to maintain its high production levels compared to other areas.
The recent heat wave that has gripped Western Europe at a time when grain fill is occurring could act as the weather event that pushes those yields lower. Since 2000, every year that saw a European heat wave in the month of June (2003, 2006, 2018, 2019, 2022) resulted in lower yields compared to the previous year, demonstrating that the relationship between excessively high temperatures and lower yields persists over time. Recent daily temperatures have reached as high as 116 degrees with areas exceeding 100 degrees as the norm, according to World Weather Inc. The forecaster also notes that the ridge of high pressure driving temperatures higher is unlikely to move, which will cause the intense heat to linger for the next week.
Holding current assumptions for yields steady in other parts of the globe, a sizable yield drop in Europe could have larger reaching impacts on wheat prices worldwide.The 2003 heatwave that swept through the EU is generally considered the standard for extreme heat limiting crop yields in the region, and saw a 9.2% decline in yields from the previous crop year.
If yields took a 10% cut from last year’s mark, all else held equal, that would push the region’s production down 154.58 MMT, and cause a 1.9% dip in the world stocks-to-use to 31.7%, the lowest since 2013, a year where the average season price received by farmers in the U.S. for wheat hit $6.87 according to USDA.
Many factors play in to determining commodity prices, but the global fundamental outlook on supply for could potentially turn bullish for wheat. The most recent June WASDE saw increases in yields in the Black Sea offset reductions that were made from the poor early harvest results in the U.S., but a cut of just 5% across the European countries could easily reverse that. Chicago wheat and French MATIF wheat futures have been in a sustained downtrend since mid-May as funds have been exiting longs across agricultural commodities. July contracts in both markets are on the brink of firm psychological marks: $6.00 for Chicago and the €200 mark in France. Traders’ reactions to the recent weather developments, and which side of those levels futures end up settling on, is likely to drive price sentiment in coming weeks.
