Wheat Market Faces Historic Lows: Oversupply, Strong Euro, and Export Jitters

The global wheat market is experiencing a period of significant bearishness, marked by historic price declines on key exchanges and ample global supply. On Tuesday, Euronext futures plummeted to multi-year lows, with March wheat closing at €185.75/tonne—the lowest front-month settlement since August 2020. The predominant force behind this downturn is a record-setting world wheat harvest, which has lifted exportable supplies in all major producing countries. On top of this, the euro’s recent strength, with the ECB reference rate peaking at 1.1776 USD, has pressured euro-zone export competitiveness further. Additional stress comes from France, where winter wheat plantings are up by 100,000 hectares for next year, and crop conditions are reported as excellent—with FranceAgriMer rating 97% of fields as good or excellent, up 11 percentage points year-on-year. Despite these strong fundamentals, France’s wheat export expectations outside the EU have been downgraded, while intra-EU deliveries are set to rise. This all points to persistent oversupply and pressurized internal markets, particularly as Germany is poised for increased French wheat inflows.

Physical spot markets mirror this sentiment. For example, feed wheat in Südoldenburg dropped €2 to €197/tonne, while Hamburg bread wheat held steady at the same level. EU soft wheat exports for the current season have reached 10.52 million tonnes, trailing last year’s pace modestly. France and Romania remain the bloc’s largest exporters. The pressure from large crops, shifting trade flows, and an increasingly strong currency set the backdrop for further downside risk—unless adverse weather or policy-driven surprises materialize.

📈 Prices: Futures & Physical Markets

Exchange	Contract	Last Close	Weekly Change	Market Sentiment
Euronext	Mar 26	€185.75/t	–	Bearish
Euronext	May 26	€187.75/t	–	Bearish
CBOT	Mar 26	507.25 USc/bu	+0.20%	Bearish
CBOT	May 26	518.25 USc/bu	+0.19%	Bearish
ICE	Jan 26	£165.00/t	+1.55%	Neutral/Bearish
CBO (Spot, US FOB)	Protein 11.5%	€0.22/kg	+9%	Weak-Rising
FR FOB Paris	Protein 11.0%	€0.29/kg	+7%	Weak-Rising
UA FOB Odesa	Protein 11.0%	€0.19/kg	Flat	Stable

🌍 Supply & Demand

• Global Production: 2025/26 harvest projects new record output, led by the EU, Russia, and North America.
• France: Winter wheat plantings up to 4.56 million ha; 97% of crop in good/excellent condition.
• Exports (EU): 10.52 Mt shipped season-to-date, led by Romania and France. Non-EU French exports forecast cut by 250,000 t (now 7.6 Mt); intra-EU forecast raised to 7.39 Mt.
• Stocks: French ending stocks for 2025/26 seen slightly lower but overall supply pressure remains high.
• Speculative Positioning: Managed money remains net short as traders anticipate ongoing oversupply.

📊 Fundamentals and Drivers

• Record harvests create significant exportable surpluses in all major origins.
• France—EU’s main supplier—faces sluggish non-EU demand, shifting flow to neighboring countries (notably Germany).
• The firming euro further erodes EU wheat’s competitiveness on the world stage.
• Physical demand shows little urgency; spot offers in Germany and France remain weak or lower week over week.
• Price-depressing momentum persists unless weather or policy shifts spark demand or damage yields.

☁️ Weather Outlook

• Western Europe: Mild winter forecast continues, with favorable precipitation and above-normal temperatures expected. This supports strong crop development and maintains excellent condition ratings in France and Germany.
• Black Sea: Mostly normal to above-average conditions; no immediate weather threats.
• North America: U.S. Plains and Midwest report sufficient soil moisture, preventing stress for winter wheat.
• Impact: No major weather risks foreseen for key producers in the short term—further cementing the prospect of high supplies into 2025/26.

🌏 Global Production & Stock Comparison

Country/Region	2025/26 Production (Mt)	Exports (Mt, estimate)	Ending Stocks (Mt)
EU	136.5	37.0	16.7
Russia	88.0	48.0	15.2
US	52.5	20.0	17.0
Canada	31.0	23.0	4.5
Australia	28.5	22.0	3.8
Ukraine	20.5	14.5	2.0

🚦 Trading Outlook & Recommendations

• Bearish bias for the next quarter: Oversupply, strong euro, and sluggish export demand weigh on prices.
• Short-term rallies likely to be capped by heavy farmer selling above €190-195/t on Euronext.
• Look for any adverse weather shock or export policy changes as potential bullish triggers—but none are in sight near term.
• Producers: Consider pre-hedging 2025/26 crop on any price rebounds. Maintain price risk management discipline.
• Buyers: Remain patient; consider scaling in procurement only if Paris falls below €185/t or CBOT dips under 500 USc/bu.
• Speculative traders: Maintain moderate short positions with stop-loss above €195/t Paris and 520 USc/bu CBOT.

📆 3-Day Price Forecast

Exchange	Contract	Current	Forecast (3 days)	Direction
Euronext	Mar 26	€185.75/t	€183-187/t	Soft Bearish
CBOT	Mar 26	507.25 USc/bu	505-510 USc/bu	Range/Bearish
ICE	Jan 26	£165.00/t	£164-167/t	Stable