Trade hopes for rain as Bulgarian and Romanian grain fields remain dry

Extreme dry conditions to affect 2023-24 grain crops

Market sources from the European Black Sea have reported extremely dry weather conditions across the fields of Bulgaria and Romania, raising concerns over winter grain conditions and the upcoming spring sowing campaign.

The sowing campaign, due to start in a couple of weeks, will be difficult unless the soil sees some rains in March, as “farmers will have to use expensive artificial fertilizers,” a source said.

“[The conditions are the] driest on record for this time of the year, but still, rains in March might save the situation,” a Bulgaria-based broker told Fastmarkets Agriculture.

Bulgarian farmers might face a loss of around 2 million tonnes of grain crops in the 2023-24 season if the drought continues, traders have warned.

Dry weather has already caused a shortage of the 2022-23 crop size, which led to Romanian farmers applying for governmental subsidies and receiving €1 billion in compensation from the European Commission.

Farmers are also holding on to existing grain stocks to maintain supply in case of shortage.

“They can receive financial compensation, but they can’t replace the cargo required for local consumption,” a trader told us.

Wheat price drop

Another reason for local farmers to hold off from selling stocks is low international wheat prices, as weak Euronext futures and Russia’s bumper crop continue to push prices lower.

“Farmers are not selling at current levels, awaiting higher prices, but they are also keeping the goods in their warehouses in very poor conditions, instead of selling it to traders, who have modern silos,” a Bulgaria-based trader said.

“Farmers are never happy with prices, but in 2022 they did not expect the export corridor agreement that put so much weight on global prices. They were hoping for export levels to continue firming,” another trader commented, adding that they “expect more activity in the local market in April.”

What to read next
Speculators in the US corn market cut short positions, helping send the net short to the highest level since August 2023, while adding shorts in soybean and wheat contracts in the week to Tuesday October 29, data from the Commodity Futures Trading Commission (CFTC) showed late on Friday November 1.
Canada's grain and oilseed exports fell 38%, with significant declines in wheat and canola, despite strong soybean exports, according to the Canadian Grain Commission
The USDA's latest crop progress report indicates strong advancement in the harvest of major crops, with corn and soybeans making significant strides.
The managing director of CANAMI highlighted Mexico's growing dependence on corn imports due to reduced self-sufficiency, exacerbated by drought impacts on production.
India’s corn consumption could spike in 2025 amid expectations that the government may hike its ethanol mandate and force increased use of the grain, trade sources told Fastmarkets in the week to Friday October 11
A meeting between Russia’s Ministry of Agriculture and the country’s grain exporters is expected to be held on Friday October 11 to discuss potential restrictions on exports, sources told Fastmarkets on Wednesday October 9.