US wheat stress boosts EU export appeal as MATIF holds firm

US winter wheat stress and weather risks are underpinning global prices, while MATIF wheat around EUR 215–225/t and a weak euro are enhancing EU export competitiveness. After a strong US-led rally, wheat markets are consolidating but remain weather‑driven. Severely deteriorating US winter wheat ratings and high abandonment in the Southern Plains are tightening exportable supplies and supporting CBOT contracts, even after today’s slight setback. EU wheat is following the firmer US market, and the softer euro is clearly improving the attractiveness of European offers versus US and Black Sea origins, particularly into West Africa and the US East Coast. Solid EU export flows and a small Algerian purchase confirm underlying demand, while increased German wheat area points to comfortable medium‑term supply.

Prices & Spreads

On Euronext, new-crop milling wheat is broadly stable after the recent upmove, with Sep 2026 trading around EUR 216.75/t and Dec 2026 at EUR 224.50/t, implying a moderate carry of roughly EUR 8/t into late 2026. Further out, Mar 2027–May 2027 hover near EUR 229.50–231.75/t, and the forward curve up to 2028/29 remains only mildly upward sloping, signaling a market that is firm but not yet in panic about long‑term supply.

In Chicago, CBOT wheat has eased slightly this morning, with Jul 2026 at about 654 USc/bu (roughly EUR 225–230/t at current FX), down nearly 1% on the day, and similar declines across the 2026/27 strip. ICE feed wheat in the UK is trading near GBP 189–203/t, equivalent to roughly EUR 220–235/t, also reflecting weather risk premiums. Physical FOB offers show US HRW around EUR 210/t, French 11% at about EUR 290/t and Ukrainian 11–12.5% mostly in the EUR 180–190/t range, underlining the price advantage of Black Sea origin but also the recent firming of EU and US values.

Supply & Demand Drivers

US winter wheat conditions remain the central driver. Only 27% of the crop is rated good or excellent, the lowest for this time of year since 1996, with 43% in poor or very poor condition according to the latest crop progress data. Drought in the Southern Plains has caused very high abandonment (around 70% in Texas and nearly half in Oklahoma), and yields on harvested acres are projected well below last year. Even with rains expected this week, much of the crop damage is irreversible, and precipitation may instead slow early harvest.

In contrast, EU supply looks structurally more comfortable. EU soft wheat exports in 2025/26 reached about 20.63 million tonnes by 17 May, roughly 7% above last season, with Romania and France leading, followed by Poland, Germany and Lithuania. A weaker euro against the US dollar further improves EU competitiveness into North and West Africa as well as the US East Coast. At the same time, Germany is expanding winter wheat area by about 1.5% to 2.9 million ha, with spring wheat up nearly 6%, pointing to stable medium‑term availability if weather cooperates.

On the demand side, North African buying remains steady. Algeria has reportedly booked a smaller soft wheat parcel around 200,000 t for Jul–Sep shipment, signaling continued baseline import needs even at higher price levels. Jordan, however, passed on a 120,000 t tender, indicating that some buyers are price‑sensitive at current values and prepared to wait for clearer direction on crop outcomes in the US and Black Sea.

Fundamentals & Weather

Global fundamentals are tightening from the record 2025 harvest but remain far from crisis levels. Early 2026/27 projections suggest world wheat production dipping from last year’s high towards roughly 820 million tonnes, still comfortably above the 10‑year average, with cuts concentrated in the US and parts of the EU and Argentina. Stocks‑to‑use are expected to edge lower but stay adequate, so the current rally is more about regional availability and quality risk than outright global shortage.

Weather is the key swing factor for the next weeks. The Southern Plains are forecast to receive widespread rains through late May, especially in the eastern half of the region, which may stabilize remaining winter wheat and improve soil moisture for summer crops but will not reverse prior yield losses. In Europe, no acute large‑scale stress has emerged in the last few days, but markets will closely track early‑summer conditions in northern France, Germany and Poland where EU exportable surpluses are concentrated.

Trading Outlook

• Buyers (millers, feed compounders): Use current consolidation in the EUR 215–225/t MATIF zone to secure a first layer of Q4 2026–Q1 2027 coverage, as US production and abandonment figures still skew risk to the upside.
• Exporters (EU/Black Sea): The weak euro and US price premium improve EU competitiveness into West Africa and the US East Coast; consider locking in basis where logistics and quality are clear, while keeping some length in case US conditions deteriorate further.
• Producers (EU): For 2026 crop, incremental hedging on rallies towards EUR 230–235/t for front MATIF contracts appears attractive given expanded planted area in Germany and still‑comfortable global stocks, but avoid over‑hedging before key flowering and grain‑fill weather is known.

3‑Day Price Indication (Direction)

• MATIF milling wheat (nearby): Sideways to slightly firmer around EUR 215–225/t, tracking US weather headlines and FX.
• CBOT wheat (Jul 2026): Volatile trade likely within a EUR‑equivalent 220–235/t band as funds reassess drought risk and incoming rain.
• Black Sea FOB (Ukraine 11–12.5%): Broadly stable near EUR 180–190/t, with modest upside if US stress persists and freight/logistics remain manageable.