Wheat under crossfire: US weather support vs. EU export drag

US wheat is drawing moderate support from ongoing dryness in the Southern Plains, while European prices remain capped by large old‑crop stocks and sluggish exports. Strong early‑April Russian shipments keep global competition intense, and recent USDA weekly export sales show steady but unspectacular demand. Futures curves on both MATIF and CBOT stay relatively flat to mildly upward, reflecting a market balanced between weather risk in the US and demand‑side headwinds in Europe.

In Europe, the key issue into the end of the 2025/26 marketing year is whether the EU can close the gap to its own soft‑wheat export target. With only about two and a half months left in the season, just 18.6 Mt had been shipped by 12 April against the EU Commission’s 28 Mt estimate, even if incomplete country reporting (notably France and Bulgaria) implies somewhat higher real volumes. At the same time, Russia’s aggressive exports and competitive Black Sea offers continue to weigh on European benchmarks, while US prices react more to weather and weekly sales signals than to export competition alone.

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📈 Prices & Futures Structure

European milling wheat on Euronext (MATIF) is trading roughly in a 194–230 EUR/t band across the 2026–2028 curve, with the nearby May 2026 contract around 194 EUR/t and a mild carry out to 2028 above 220 EUR/t. This confirms a comfortable supply picture in Europe, especially for old crop, and limited fear of short‑term scarcity.

On CBOT, front‑month May 2026 wheat is around 598.5 USc/bu, equivalent to roughly 22 EUR per 100 kg (about 220 EUR/t), leaving US futures broadly aligned with MATIF values after currency adjustment. ICE feed wheat in the UK is firming modestly, with May 2026 at about 177 GBP/t, roughly 207 EUR/t, indicating that feed demand and regional logistics are giving some relative support versus continental milling wheat.

🌍 Supply, Demand & Trade Flows

In the US, the wheat market remains underpinned by dry conditions in the Southern Plains, a key hard red winter wheat belt. This raises concern about yield and quality risks for the upcoming harvest and helps prevent a deeper price correction despite ample global supply.

In contrast, the European old crop is under pressure from high carry‑over stocks and sluggish export demand. With only about 2.5 months left in the 2025/26 marketing year, the EU has shipped 18.6 Mt of soft wheat as of 12 April versus the Commission’s 28 Mt export forecast, even allowing for under‑reporting from major exporters like France and Bulgaria. This questions how realistic the official export target is and keeps physical and futures markets well supplied.

Russia continues to play a central role on the export side. From 1–10 April, Russian wheat exports reached almost 1.1 Mt, about 1.4 times last year’s volume for the same period (745,000 t). Main buyers were Egypt (172,000 t), Turkey (146,500 t), Kenya (146,000 t), Saudi Arabia (60,500 t) and Tanzania (54,300 t), confirming strong demand for competitively priced Black Sea origin.

Even so, analysts expect the Russian export pace to ease in April versus March, with SovEcon projecting a decline from 4.7 Mt to 3.7 Mt. This would still leave Russia as a dominant price setter in many destination markets but suggests some moderation in the downward pressure on alternative origins, notably the EU.

📊 Demand Signals & Fundamentals

USDA’s latest weekly export report for the week to 9 April shows 100,318 t of old‑crop US wheat sales in the 2025/26 season, in line with expectations of 75,000–250,000 t. Nigeria (52,400 t) and Vietnam (34,800 t) were the main old‑crop buyers, indicating ongoing but not exceptional demand.

New‑crop (next marketing year) sales reached 131,000 t in the same week, again squarely within trade estimates. South Korea booked 90,000 t and Mexico 22,000 t, pointing to steady pipeline filling rather than a structural shift in demand. Overall, these figures support a view of balanced but unspectacular global import interest at current price levels.

Physical price indications from the Black Sea and EU remain very competitive. Recent offers for Ukrainian wheat (non‑organic, 95–98% purity, 10.5–12.5% protein) from Odesa and Kyiv cluster around 0.18–0.25 EUR/kg (roughly 180–250 EUR/t, FCA/FOB). French FOB wheat from Paris is indicated at about 0.29 EUR/kg (~290 EUR/t), maintaining a premium over Ukrainian origin and underscoring pressure on EU exporters facing cheaper Black Sea competition.

⛅ Weather & Regional Outlook

The central fundamental risk on the weather side remains the continued dryness across the US Southern Plains winter wheat belt. If this pattern persists through heading and early grain fill, yield expectations could be revised down, lending further support to CBOT futures and, indirectly, to other origins.

In Europe, no acute, generalized weather shock is currently dominating sentiment; instead, the key driver is the burden of old‑crop inventories and the challenge of accelerating exports before the marketing year closes. Any later‑season weather issues in the EU would mainly affect new‑crop pricing from late summer onward rather than alleviate the immediate old‑crop overhang.

📆 Trading Outlook & Strategy

• For EU growers: Old‑crop rallies are likely to be capped by high stocks and slow exports; use short‑term weather‑ or currency‑driven price spikes to advance sales, especially for lower‑protein lots.
• For importers in MENA/Africa: Continue to diversify between Russian, Ukrainian and EU origins, using Russia’s still‑strong export pace to secure nearby needs while monitoring any further weather‑driven strength in US prices.
• For feed users in Europe/UK: Current differentials between feed and milling wheat remain favorable; consider extending coverage modestly into Q3 while futures remain near the lower end of the recent range.
• For speculative traders: Market is balanced between US weather risk and EU surplus; strategies that buy US weather risk (e.g., call spreads) financed by selling some of the European carry may capture potential tightening without over‑exposure.

📉 3‑Day Price Indication & Direction

• MATIF wheat (May 2026): Around 194 EUR/t, bias slightly sideways to soft as EU export doubts linger.
• CBOT wheat (May 2026, in EUR/t): Roughly 220 EUR/t equivalent, with a mildly supportive bias tied to ongoing US Plains dryness.
• Black Sea physical (UA FCA/FOB): Indicative 180–250 EUR/t remains competitive; direction broadly stable over the next three days absent new geopolitical or weather shocks.

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