Cereals in Poland
The global market will remain under the influence of a large supply of cereal grain, especially from Russia and Ukraine, despite lower harvests in these countries. Additionally, information on the condition of cereal crops in the world and forecasts of their harvest in 2024 will have a significant impact on grain prices. As a result, the global market will remain sensitive to disturbing signals regarding crops, mainly wheat. The uncertainty of the situation on the grain market means that the directions of price changes on the main world exchanges will have a significant impact on the price situation in Poland.
Winter cereals
In Poland, the assessment carried out in the first half of May 2024 by the Polish Central Statistical Office shows that the condition of winter cereal crops was better than last year. Losses in winter cereal crops were practically small. At the beginning of March 2024, agrometeorological conditions allowed spring field work to be carried out, including sowing with a slight delay. Warm and sunny weather at the turn of March and April 2024 had a beneficial effect on the life processes of plants. Rainfall ensured good soil moisture and secured the water needs of plants. Significant drying of the soil occurring at the end of April and in the first half of May this year inhibited the growth and development of spring crops.
Spring cereals
However, the assessment of the condition of spring cereal crops was slightly higher than last year's assessment. Nevertheless, the level of grain yields and harvests in 2024 will be determined primarily by agrometeorological conditions in the further vegetation period, especially in its last phase and during the harvest period.
Weather and economic conditions
In April 2024, unfavourable crop conditions (heavy rainfall and frost) affecting the 2024 harvest in parts of the European Union, the Russian Federation and the USA contributed to an increase in global grain prices. The increase in grain prices continued in May this year, due to growing concerns about unfavourable crop conditions that could limit yields in some production areas, in several major exporting countries, including parts of Europe, North America and the Black Sea region. In addition, damage to shipping infrastructure in the Black Sea has increased the pressure on the growth of grain prices. As a result, in May 2024, the average export prices of wheat in the world increased dynamically. At the same time, export prices of corn have also increased, mainly due to high import demand in the conditions of limited grain sales activity by farmers in Ukraine. Barley prices have also increased accordingly.
Grain market
The global price changes had a delayed impact on domestic Polish grain prices. While wheat and corn prices did not increase until May, other grains experienced lower price increases due to limited demand.
In May 2024, the price of consumption wheat in Poland was 9% higher than the previous month. Rye and feed barley prices also increased but were lower compared to the previous year. Corn prices increased by 8% in May but were still 25% lower than a year ago.
In June, domestic grain prices continued to increase slightly, reflecting the global market trends. However, they remained higher than the previous month.
Outlook for the Grain Market
The global grain market is expected to be influenced by a large supply of cereal grain, particularly from Russia and Ukraine, despite lower harvests in these countries. The condition of cereal crops worldwide and harvest forecasts will significantly impact grain prices. Therefore, the market will remain sensitive to any disruptions in crop production, especially for wheat. The uncertainty in the grain market means that price changes on major world exchanges will continue to affect domestic prices in Poland.
Source: Biuletyn Informacyjny KOWR