Wheat Market Finds Support from High Oil and U.S. Prices, But Old-Crop Stocks Weigh

Wheat markets are firming, supported by surging oil prices and elevated U.S. wheat quotations, while heavy old-crop stocks in Europe and cautious import demand are capping rallies. Speculative money has turned notably more bullish on Euronext milling wheat, but physical export flows remain subdued as buyers hope for a geopolitical easing in the Persian Gulf and lower prices.

TheEuropean cash market for old-crop wheat is largely sideways, reflecting burdensome inventories and recurring sales from storage. In contrast, new-crop pricing has improved markedly: in South Oldenburg, feed mills are now paying about EUR 226/t for September delivery, up EUR 11/t week-on-week, widening the spread to May to EUR 21/t. Higher U.S. prices are starting to open arbitrage windows for EU-origin wheat to both the U.S. East Coast and West Africa, even as poor weather risks in the U.S. and Australia keep global price risk skewed to the upside.

📈 Prices & Market Mood

Euronext milling wheat continues to draw support from sharply higher oil prices and the increased price level in the U.S. futures market. Month-end profit taking pushed Chicago (CBOT) wheat into the red on Wednesday, but the Kansas City and Minneapolis exchanges again closed higher, underscoring quality and weather concerns in key U.S. plains and spring wheat regions.

In Germany, spot cash prices for old-crop wheat are moving very little. Large on-farm and commercial stocks repeatedly re‑enter the market, generating selling pressure on rallies. By contrast, forward prices for the 2026/27 crop have improved significantly, with September feed-wheat bids in South Oldenburg now at roughly EUR 226/t, EUR 11/t higher than a week ago, and the May–September spread widening from EUR 12/t to EUR 21/t in just one week.

📊 Indicative International Price Levels (converted to EUR/t)

Origin / Spec	Location & Terms	Latest Price (EUR/t)	Weekly Change (EUR/t)
Ukraine, 11.5% protein	Kyiv, FCA	≈ EUR 240/t	Stable vs. 23 April
Ukraine, 11.5% protein	Odesa, FCA	≈ EUR 250/t	Stable vs. 23 April
France, 11.0% milling	Paris, FOB	≈ EUR 270/t	−≈ EUR 10/t over April
U.S. SRW (CBOT-linked)	FOB reference	≈ EUR 190/t	Modestly lower vs. mid‑April

🌍 Supply, Demand & Trade Flows

On the supply side, large old-crop stocks in the EU are clearly weighing on spot markets and slowing the pace of stock drawdown. Nonetheless, the forward curve signals tightening: the improved pricing for new-crop positions reflects both weather risks and the prospect of smaller exportable surpluses from key exporters.

USDA overseas posts project a notable decline in 2026/27 output in two major exporters. Australia’s wheat crop is estimated at 29 million tonnes, down 6 million tonnes year-on-year, while Canada is seen at 36.16 million tonnes, 3.8 million tonnes below last season. These prospective cuts reduce global export availability and underpin medium-term price support despite current EU stock burdens.

Trade flows are in transition. High U.S. wheat prices are making EU wheat more competitive into the U.S. East Coast, a relatively rare arbitrage that could activate in the coming months. At the same time, EU export opportunities into West Africa are improving after months in which cheaper U.S. wheat displaced traditional EU shipments. However, overall export demand remains muted as importers delay purchases, betting that an eventual easing of tensions in the Persian Gulf and lower freight and energy costs will bring down wheat prices.

📊 Positioning & Macro Drivers

Speculative money has turned decisively more bullish on Euronext milling wheat. In the week to 24 April, investment funds and financial institutions switched from a net short of 11,168 contracts to a net long of 5,991 contracts, according to the latest exchange data. Commercial hedgers moved in the opposite direction, flipping from a net long of 19,695 contracts to a small net short of 1,553 contracts, signaling more active producer hedging into the rally.

Macro and energy markets are a key backdrop. Oil prices have surged again this week on fears of prolonged supply disruption in the Strait of Hormuz, with Brent trading back above USD 115/bbl. Higher energy prices lift production, freight and fertilizer costs, indirectly supporting grains and oilseeds. The current conflict-driven oil shock is already described by international institutions as one of the sharpest in recent years, with spillovers into agricultural prices expected to be stronger than in past episodes.

In addition, weather concerns are resurfacing. Market commentary highlights ongoing dryness and yield risk in parts of the U.S. wheat belt and Australia, contributing to the recent strength in global wheat futures. Against this backdrop, today’s USDA weekly export sales report for the week to 23 April is expected to show only modest U.S. wheat sales: trade estimates range from 0–300,000 tonnes for old crop and 0–200,000 tonnes for new crop, underscoring that the rally is still driven more by supply and risk premia than by demand.

🌦 Weather Outlook (Key Wheat Regions)

United States: Short-term forecasts point to continued variability, with parts of the central and southern Plains staying drier than normal, keeping stress elevated for hard red winter wheat. Northern areas may see some rain, but not enough yet to fully allay concerns about yield potential.

Australia: Seasonal outlooks maintain a risk of below-average rainfall in some core wheat-producing regions as the 2026 season advances, reinforcing USDA’s expectation of a smaller crop versus last year.

Canada: Conditions are mixed, with generally adequate soil moisture in parts of the Prairies but persistent uncertainty about planting progress and summer precipitation patterns. With USDA’s post already penciling in a 3.8‑million‑tonne year-on-year decline, weather through late spring will be closely watched.

📆 Trading Outlook & Strategy

• Producers (EU): Consider scaling in additional new-crop sales on current strength, especially where local September bids (around EUR 226/t in North-West Germany) offer attractive margins versus historical averages, while keeping some upside open given geopolitical and weather risks.
• Consumers (mills, feed producers): Maintain at least partial coverage into early 2026/27. Use any short-term price setbacks triggered by profit taking or positive news from the Persian Gulf as opportunities to extend coverage, particularly for higher-protein wheat.
• Exporters: Monitor emerging arbitrage into the U.S. East Coast and West Africa closely. With EU wheat regaining competitiveness, flexible logistics and basis management will be crucial to capture short-lived windows.
• Speculative participants: The recent shift of funds into net long territory on Euronext and the still cautious physical demand suggest higher volatility ahead. Tight risk management is warranted around macro headlines and USDA reports.

📍 3-Day Directional Outlook

• Euronext (Milling wheat): Slightly bullish bias. Elevated oil prices and fund length support, but gains may be limited by heavy EU stocks and month-end positioning.
• CBOT (SRW wheat): Consolidation with an upward tilt. After recent profit taking, markets may stabilize, with weather risks in the U.S. Plains keeping dips shallow.
• Cash EU (North-West Europe): Old-crop spot values seen broadly steady; new-crop bids likely to remain firm to slightly higher as long as oil stays elevated and forecasts for Australia and Canada remain less favorable.