THE WATCHLIST: West Side Story

Europe’s heatwaves are mainly a problem for crops in its west. Crops in central and eastern Europe are, for now, more robust. Europe’s crop issues thus lack global production impact. As do dry winter crops in Australia’s Queensland. Any likely production loss can be absorbed by likely supply elsewhere. Both are thus issues for local basis, rather than global prices.

July 5, 2026

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WHEAT

Wheat continues to have few weather risks. Northern winter crops are mostly maturing or being harvested. Any likely weather risk is now modest. Australia‘s winter crop regions are mostly okay or better at present but face a drier period over the next week or so. El Niño conditions are a nascent worry for Australia. The only real issue for now, though, remains Queensland. This region has, at most, had modest soil moisture since planting. Now the region is largely dry. And forecasters do not expect that to change for at least another week or so. The region, therefore, remains a ‘watch’. The area’s wheat production is modest in global terms, so this concern impacts local basis rather than global prices.

COARSE GRAIN

Coarse grain crops continue to face a couple of modest issues.

Europe‘s issues with hot and dry weather are spreading eastwards. Forecasters expect unusually high temperatures through to western Ukraine over the next week or so. Rainfall is likely more mixed, with little in the west and somewhat more in the east. While the issue is geographically contiguous, for crop purposes, it is probably better to split the issue into two. One in the west, and one in the centre and east. In western Europe, summer crops in France and Spain have already suffered badly in these heatwaves. Dryland crops here were planted into marginal soil moisture at best. Early growths would, therefore, be vulnerable anyway. The heatwave to date, therefore, likely badly damaged these crops. And, with further heat and little rainfall to come, potential production is likely falling by the day. The Watchlist thus has this region as ‘losing’. In central and eastern Europe, by contrast, the issue is much more recent. Crop planting and early development were in a good or better soil moisture context. Crops, therefore, were likely in robust condition until the heatwaves. The heat and now lower soil moisture certainly challenge crops here. However, the starting point is very different. And, forecasters expect less heat and more rain here. The shorter period and less threatening forecasts mean we do not, yet anyway, regard this as worthy of a ‘watch’.

Dry weather in Australia‘s Queensland remains relevant to feed grain. In global terms, the production at risk is modest, so there is little impact on global prices. Local price basis, by contrast, is likely higher given that summer feed crops were modest in this region.

The overall market impact is likely to remain modest in global terms for a couple of reasons. One, global supply is already healthy. Two, other northern summer crops are in good shape.

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OILSEEDS

Oilseeds continue with few specific risks for now. Northern summer crop planting remains supported by mostly good soil moisture. The dry areas of western Europe are an issue, but are too small to have any global market impact for now.