Wheat Market on the Edge: Global Surplus, Currency Moves & Weather Shape Direction

The wheat market finds itself in a delicate balancing act between underlying bearish fundamentals and emerging bullish factors that may disrupt the current oversupply narrative. While recent trading saw a short-lived rebound at the Chicago Board of Trade (CBOT) on Friday, driven by a weaker US dollar and short covering, European counterparts at Euronext (MATIF) remain subdued, hovering near five-year lows. Spurts of renewed demand from importers such as Algeria, Jordan, South Korea, and Morocco underline that international appetite remains, yet the persistent global surplus continues to weigh heavily on prices.

Complicating the outlook, budget gridlock in the US threatens to delay vital USDA market reports, amplifying uncertainty. Meanwhile, robust Argentine crop conditions clash with sporadic regional weather stress in Russia, the world’s largest wheat exporter, infusing volatility across the board. Political and currency factors—like a rising Russian export tax and the contrasting movements of the dollar and euro—further shape the competitive global landscape. Will favourable Argentine yield prospects and weather relief in Russia continue to pressure prices, or will geopolitical risks and policy delays steer the market into a new bullish phase?

📈 Prices: Latest Wheat Futures & Physicals

Exchange	Contract/Origin	Last Price	Weekly Change	Currency	Market Sentiment
CBOT	Dec 25	511.50	-1.25	US-Cent/bu	Stabilising (short-covering)
Euronext (MATIF)	Dec 25	187.75	0.00	EUR/t	Supported near lows
ICE	Nov 25	165.25	-0.60	GBP/t	Weakening
Physical (US/FOB)	Protein min. 11.5%	0.21	0.00	EUR/kg	Stable
Physical (FR/FOB)	Protein min. 11.0%	0.27	0.00	EUR/kg	Stable
Physical (UA/FOB)	Protein min. 11.0%	0.19	0.00	EUR/kg	Stable

🌍 Supply & Demand Drivers

• Global wheat supply remains ample, exerting persistent downward pressure.
• Renewed buying interest from traditional importers including Algeria, Jordan, South Korea, and Morocco provides limited support.
• US budget standoff may delay USDA reports, injecting short-term uncertainty into market data flows.
• Stronger euro (vs. dollar) recently diminished European wheat’s export competitiveness despite bouts of international demand.
• Russia raises its wheat export tax to 493.5 Rubel/tonne (~€5.11/tonne), supporting international price stability.

📊 Fundamentals Snapshot

• Argentina: Buenos Aires Grain Exchange reports 93% of crop in good/excellent condition. 2025/26 output revised up to 22 million tonnes, near historical record (22.4 million, 21/22 season).
• Russia: Rains in the South expected to ease dryness affecting a third of wheat areas, favourable for planting/yields. Stable export prices and government policy provide support.
• Speculative Positioning: Short covering at CBOT after recent lows, but overall speculative exposure remains cautious amid policy and weather risks.

⛅ Weather Outlook & Impact Analysis

• Argentina: Consistently good soil moisture; harvesting starts in November with yields expected at the upper end of the range.
• Russia: Upcoming rains in the South over the next 10 days are likely to alleviate planting stress and drought risks, potentially boosting crop yields.
• US, EU: No major near-term weather threats reported, but monitoring is critical given delayed USDA reporting.

🌐 Production & Stocks: Global Peers

Country	2025/26 Output Forecast (Mt)	Y/Y Change	Notes
Argentina	22.0	+0.5	Record-high potential
Russia	92.0*	Flat	Weather risk easing
EU	130.0*	Flat	Export competitiveness in focus
USA	49.0*	-1.0	Harvest near completion
Ukraine	21.0*	Flat	Export corridor stabilizing

*Estimates, to be updated following delayed USDA/WASDE report

📌 Key Insights & Trading Outlook

• Short-term volatility expected as markets await delayed USDA data and monitor US political developments.
• Stable to slightly firmer international prices, with possible upside should Russian weather deteriorate or new geopolitical issues arise.
• Improved Argentine conditions and bumper prospects may cap rallies, keeping pressure on deferred contracts.
• Import demand, especially out of North Africa and the Middle East, to provide bursts of buying but unlikely to overcome global surplus.
• Watch for currency volatility and changes to Russian export policy as potential upside catalysts.

Trading Recommendations

• Producers: Consider forward sales on near-term rallies; focus on demand signals and geopolitical risk premiums.
• Buyers: Stagger purchases, monitor deferred contracts for attractive entry points amid oversupply.
• Speculators: Short-term opportunities possible on USDA data delays and weather headlines; maintain tight risk management.

📆 3-Day Regional Price Forecast

Exchange/Origin	Spot Price	3-Day Forecast	Sentiment
CBOT (Dec 25)	511.50 US-Cent/bu	510-515 US-Cent/bu	Slightly firmer, range-bound
MATIF (Dec 25)	187.75 EUR/t	187-190 EUR/t	Stable, with upward potential
ICE (Nov 25)	165.25 GBP/t	165-166 GBP/t	Sideways, mild downward risk
FOB Ukraine	0.19 EUR/kg	0.18-0.19 EUR/kg	Stable, watch Russia weather