Forward contracts are used to fix a price before harvest, providing financial predictability. In the context of cereal market volatility in 2024–2025, this instrument has become increasingly present in the relationship between farmers and traders.

According to European Commission analyses, price volatility for wheat and corn has remained high amid geopolitical tensions and fluctuations in global production. In this context, fixing a price in advance can reduce uncertainty, but it also involves risks.

The main risk arises when production falls below the contracted level. In agricultural years affected by drought or other extreme events, farmers may be forced to purchase commodities from the market in order to fulfill their contractual obligations.

For 2026, the use of forward contracts must be correlated with realistic production estimates and a risk management strategy. The contract is a financial instrument, not a guarantee of profit.

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