Wheat pressured by strong euro and ample Black Sea supply despite US weather risks

Wheat prices are currently under mild downward pressure as a stronger euro and expectations of ample Black Sea and North African supply outweigh emerging weather risks in the US winter wheat belt.

The market focus has shifted clearly toward new‑crop prospects. European wheat at Euronext is struggling to gain traction despite steady futures levels, as a firmer euro and lower energy prices cap rallies. At the same time, Russia reports an excellent winter crop condition and North African harvests are starting, with some areas heading for record yields, curbing short‑term import demand. US futures recover only cautiously amid ongoing drought in parts of the Hard Red Winter wheat region, while Soft Red Winter areas remain adequately supplied with rain. Overall, the balance tilts bearish to neutral in the short term, with weather risk mainly a US story.

📈 Prices & Term Structure

Euronext (MATIF) milling wheat futures are flat across the curve, with the front contract May 2026 last quoted around EUR 195.75/t and new‑crop September 2026 at about EUR 205.75/t. The forward curve is gently upward sloping, reaching roughly EUR 222–231/t for 2027–2028, reflecting comfortable but not excessive long‑term supply expectations.

On CBOT, wheat futures are slightly firmer, with May 2026 trading near 593.5 US‑ct/bu and December 2026 around 632.25 US‑ct/bu, indicating modest risk premium as US weather remains uncertain. Converted indicative physical offers show FOB US wheat (protein 11.5%) around EUR 7.72/t, French FOB wheat (11.0%) about EUR 10.65/t and Ukrainian FOB wheat (11.0%) near EUR 6.61/t, underscoring the persistent price advantage of Black Sea origins.

Market	Reference	Approx. price (EUR/t)
Euronext	May 2026 futures	195.75
Euronext	Sep 2026 futures	205.75
Physical US	FOB 11.5% protein	≈ 7.72
Physical FR	FOB 11.0% protein	≈ 10.65
Physical UA	FOB 11.0% protein	≈ 6.61

🌍 Supply & Demand Drivers

European wheat is weighed down by macro headwinds rather than local scarcity. A clearly stronger euro versus the US dollar, now at its highest level since early March, reduces the competitiveness of euro‑denominated exports and directly pressures Euronext quotations. Additionally, weaker crude oil prices are translating into softer sentiment across agricultural commodities, limiting upside momentum.

Fundamentally, supply prospects look comfortable. Russia’s agriculture ministry estimates that 97% of winter crops are in good or satisfactory condition, well above the 87% reported in March 2025, pointing to another very strong Russian harvest. At the same time, North African countries are beginning their harvest, with some regions projected to achieve record yields. This early and plentiful local supply will temporarily dampen import demand and could reduce aggregate buying needs in the 2026/27 season.

📊 Export Flows & Regional Dynamics

EU soft wheat exports remain positive but fail to excite the market. Since the start of the 2025/26 season in July, EU soft wheat exports reached 18.574 million tonnes by 12 April, up from 18.263 million tonnes a week earlier and roughly 8% above last year’s pace. Nonetheless, these figures are not strong enough to offset the bearish influence of the strong euro and abundant Black Sea supply on Euronext prices.

Within the EU, Romania remains the leading soft wheat exporter with 6.22 million tonnes shipped so far, followed by France (4.85 million tonnes), Poland (2.37 million tonnes), Lithuania (1.81 million tonnes) and Germany (1.51 million tonnes). This distribution highlights the continued dominance of Black Sea‑adjacent origins and suggests that traditional exporters like France face intense competition both within the EU and from Russia and Ukraine on global tenders.

🌦️ Weather & Crop Conditions

Weather is emerging as the main supportive factor, but its impact is geographically uneven. In Russia, winter wheat is in excellent shape, supporting expectations for another bumper crop and reinforcing the global supply buffer. In North Africa, generally favorable conditions underpin the forecast of partly record harvests, further reducing regional import dependence.

In the United States, however, farmers are still waiting for meaningful rainfall. Ten‑day forecasts point to continued dryness in parts of Texas and Kansas, where Hard Red Winter wheat is already under drought stress. In contrast, Soft Red Winter wheat regions are expected to receive additional precipitation, helping to stabilize yield potential there. For now, US weather risk justifies a modest premium on CBOT but is not yet severe enough to shift the global balance.

📉 Market Sentiment & Speculative Positioning

Market sentiment at Euronext remains subdued. Traders are increasingly focused on the upcoming harvest, and the combination of a strong euro, weak energy markets and expectations of large Black Sea and North African crops fosters a cautious to bearish stance. The absence of fresh escalation in the Iran–US conflict has also removed a key geopolitical risk premium that had recently supported grains.

Speculative participants appear reluctant to add significant long exposure at current levels given the benign global supply narrative. The slightly firmer tone on CBOT reflects more localized US weather risk rather than a broader shift in global fundamentals. As a result, price action is characterized by shallow rallies being sold into, especially on Euronext, while downside is cushioned by the need to maintain some weather risk premium into harvest.

📆 Trading Outlook (Short Term)

• Producers (EU): Consider incremental hedging of 2026/27 output on Euronext in the EUR 205–215/t range, as strong Russian and North African crops and a firm euro limit upside. Maintain some unhedged volume in case US weather risk escalates.
• Importers (MENA/Asia): Use current weakness to secure additional coverage from Black Sea and Romanian/French origins, especially for nearby positions, but avoid over‑committing in case further macro‑driven downside emerges.
• Traders: Favor selling Euronext rallies against CBOT on relative value, reflecting stronger euro, softer EU export competitiveness and comparatively higher weather risk in the US.

📌 3‑Day Price Indication (Directional)

• Euronext wheat (nearby): Slightly bearish to sideways in EUR terms, with the strong euro and weak energy complex capping any rebounds.
• CBOT wheat: Sideways to mildly firm, tracking US weather headlines from Texas and Kansas but constrained by heavy global supply expectations.
• Black Sea physical offers: Stable and remain the global floor, with Ukrainian FOB values staying at a clear discount to EU and US origin.