Wheat Market Sheds Gains, Faces Inventory Pressure – Is 200 €/t the New Floor?

The wheat market has recently experienced a notable correction as investors took profits following earlier price gains, triggered in part by developments in energy markets. Despite this pullback, futures prices appear unlikely to dip below the psychological threshold of 200 EUR/t in the short term. Cash markets have also followed the downward trajectory, registering clear decreases on Tuesday. However, with considerable old-crop inventories in Germany, there is still justification to continue marketing existing stock—especially as these large holdings could exert additional price and supply pressure leading up to the harvest of the new crop.

The latest WASDE report did little to alter market sentiment, bringing minimal changes globally. Noteworthy, though, was the slight uptick in EU feed-use consumption, and an unexpected tightening in world ending stocks, largely due to adjustments in Argentinian and Russian export numbers. Meanwhile, India’s government projects a record wheat production for 2026, driven by favorable monsoons and improved soil moisture levels—a development that could shape global supply dynamics over the next season. Although EU export numbers remain robust, with a 9% increase year-on-year and Romania leading regional shipments, any clear downward move in prices may ultimately depend on the pace of export flows and how inventories are managed across Europe ahead of the next harvest.

📈 Prices

Exchange	Contract	Last/Close	Weekly Change	Currency	Market Sentiment
Euronext (MATIF)	May 26	206.00	0.00%	EUR/t	Weak/Consolidating
CBOT	May 26	598.75	+0.67%	US-Cent/bu	Volatile
ICE	May 26	170.40	+0.23%	GBP/t	Softening

🌍 Supply & Demand

• Large German inventories remain a key risk for further price declines until the 2026 harvest.
• EU feed wheat consumption revised higher by 1 million tonnes (now 51 Mt), but EU export forecast cut by 1 Mt to 30.5 Mt by USDA. Net stocks unchanged.
• Strong EU exports: 16.50 Mt so far (+9% y/y), with Romania, France, and Poland the top exporters.
• US balance sheet unchanged; US ending stocks steady at 931 million bushels.
• Global stocks dropped slightly to 276.96 Mt—driven primarily by a drawdown in Argentinian inventories (higher exports) and a 0.5 Mt cut to Russian exports.
• India’s 2026 crop forecast to hit a record 120.21 Mt, thanks to excellent monsoon rains and increased winter planting.

📊 Fundamentals

• Pressure from old-crop inventory weighs on physical markets—especially in Germany, where storage remains high.
• No major surprises from the March WASDE; world supply-demand balance marginally tighter, but export competition among suppliers persists.
• EU’s major soft wheat exporters continue to lead in regional shipments; orientation towards feed and export markets is shaping demand outlook.

⛅ Weather Outlook

• Europe: Most regions have ample subsoil moisture following winter, supporting crop development so far.
• India: Monsoon 2025 was above average, boosting irrigation water reserves and soil conditions for the record 2026 crop.
• Black Sea: Weather-neutral for now, but remains a watchpoint for any late-season stresses.

🌐 Global Production & Stocks Snapshot

Country/Region	Exports 2025/26 (Mt)	Ending Stocks (Mt)
EU	30.5	— (no change)
USA	—	25.33*
Argentina	Higher (exact value not specified)	Down 1 Mt
Russia	Down 0.5 Mt	—
India	N/A (production focus)	—
World Total	—	276.96

*US stocks converted: 931 million bu ≈ 25.33 Mt

💡 Trading Outlook & Recommendations

• Continuation of old-crop marketing advised, given persistent pressure from regional stocks (especially in Germany).
• Near-term price support at 200 EUR/t on Euronext; downside risk contained unless old-crop export flows accelerate.
• Watch for further feed-demand revisions or unexpected shocks from Black Sea/India weather.
• Short-term, price rally appears capped by stock overhang and stable global balances.
• Monitor cash basis and physical premiums for signs of emerging tightness or renewed demand.

📆 3-Day Regional Price Forecast

• MATIF (Euronext): 205–208 EUR/t (flat to slightly firm)
• CBOT: 595–605 US-c/bu (slightly firmer, volatility likely)
• ICE Feed Wheat: 169–172 GBP/t (steady to soft)