Wheat Market Rallies: Weather Worries, Fund Buybacks & Geopolitical Shocks

Amid surging geopolitical tensions and volatile weather patterns, the wheat market has experienced notable price increases across major exchanges. Short covering by speculative funds—spurred on by ongoing weather developments in the US and EU—drove a robust rally, particularly on Friday’s session. US exchanges saw traders react to ongoing dryness and frost threats to winter wheat, while France, the European wheat leader, battled excess rainfall and resulting field stress. Despite these challenges, France’s crop ratings remain stronger than at the same time in previous years, offering a mixed but broadly optimistic picture for European production outlooks.

In fundamental news, the latest USDA export data highlighted a disappointing week, with US wheat sales falling sharply and missing analyst expectations. Meanwhile, market sentiment shifted due to escalating conflict risks between the US and Iran as well as continued deadlock in Russia–Ukraine peace efforts. Policymaking also injected fresh uncertainty, with US President Trump’s surprise imposition of new import tariffs following a Supreme Court decision. On the speculative front, the CFTC reported a significant reduction in net-short wheat positions, indicating fund managers are dialing down their bearish bets. All of these factors combined to push global wheat prices upward—though the outlook hinges heavily on evolving weather conditions, global policy developments, and export competitiveness.

📈 Prices: Wheat Futures Overview

Exchange	Contract	Last Close	Change	Sentiment
Euronext (MATIF)	Mar 2026	197.00 EUR/t	0.00%	Neutral
Euronext (MATIF)	May 2026	199.00 EUR/t	0.00%	Neutral
CBOT	Mar 2026	572.25 USc/bu	-0.22%	Short-covering, Bullish
CBOT	May 2026	578.50 USc/bu	-0.30%	Short-covering, Bullish
ICE	Mar 2026 (Feed Wheat)	164.65 GBP/t	+0.21%	Slightly Positive

🌍 Supply & Demand Drivers

• US Export Sales: USDA reported 287,974 t for week to Feb 12 (down 41% WoW, 46% YoY; below most analyst forecasts).
• Major buyers: Mexico (59 Kt), Philippines (55 Kt), Dominican Republic (46.2 Kt).
• Fund Positioning: CFTC data (Feb 17): Managed money net-short CBOT wheat reduced by >17k contracts to 68,037; Kansas also saw reduction.
• France Crop Conditions: 88% of soft wheat rated good/excellent, still well ahead historically (prior year: 74%). Durum 83% good or very good.
• Weather: US: Dryness & freeze risk. France: Excess rain impacting Western regions and crop ratings.
• Geopolitics: US–Iran conflict risk, Russia–Ukraine peace standoff—both fueling risk premiums in prices.
• Policy Shocks: US Supreme Court voids earlier Trump tariffs, new 15% tariff imposed, 150 days limit, high uncertainty.

📊 Fundamentals Snapshot

• Inventories: Global stock evaluations remain steady, but watch for adverse weather impacts in key US and EU zones.
• Speculative Activity: Large short unwinds indicate a pivot in managed money sentiment; volatility is likely.
• Export Competitiveness: EU and Black Sea origins adjusting price offers to maintain share; French soft wheat premiums supported by better crop condition but supply risks increasing on weather.

🌦️ Weather Outlook & Regional Impact

• US: Central and Southern Plains to remain drier than normal; frost risk persists and may further clip yield potential.
• France & Western Europe: More rain expected; risks of saturated fields could delay spring fieldwork and increase crop stress if precipitation persists.
• Eastern Europe / Ukraine: More stable, but monitoring for cold snaps as market remains on edge due to Black Sea tensions.

🌐 Global Production & Inventory Table

Country	Recent Crop Condition	Export/Import Position
US	Dry, Frost Risk	Top exporter (weather risk)
France	Wet, 88% Good/Excellent	Top EU exporter (weather threat)
Ukraine	Stable; Black Sea logistics risk	Major exporter
Russia	Stable but geopolitically tense	World’s largest exporter

📆 Trading Outlook & Recommendations

• Monitor US and West European weather closely for further yield impacts.
• Short-covering trend among funds could lead to additional upside in the near term, but profit-taking may quickly reverse gains on bearish news.
• Geopolitical flashpoints remain key price movers—expect volatility should US-Iran or Black Sea situations escalate.
• EU wheat (especially French) retains pricing power, but margin at risk if spring rains persist.
• Tariff policy uncertainty creates headline risk for exporters and importers navigating US market dynamics.

⏳ 3-Day Price Forecast (Key Contracts)

Exchange	Contract	Price Range	Bias
Euronext (MATIF)	May 2026	197–202 EUR/t	Slightly Bullish
CBOT	May 2026	573–583 USc/bu	Sideways to Bullish
ICE	May 2026 (Feed Wheat)	166–170 GBP/t	Bullish