Wheat balances firm as EU exports rise and US supply tightens

Wheat prices are holding relatively steady as a slightly tighter US balance offsets comfortable global stocks and a modestly higher EU output and export outlook. A mix of mildly bullish and bearish signals keeps wheat in a sideways-to-firm range. Fresh crop estimates show only incremental changes globally, but the regional picture matters: EU soft wheat production and exports are edging higher, while US output and ending stocks are trimmed, led by stress in Hard Red Winter areas. Germany’s crop outlook has improved after recent rains, even if volumes remain slightly below last year. Futures on MATIF and CBOT are reflecting this tug-of-war, with limited follow-through after the latest WASDE as traders digest strong US export sales and robust Black Sea and Turkish supply.

Prices & Spreads

MATIF wheat futures were unchanged on 11 June, with Sep 2026 at about EUR 203/t and Dec 2026 around EUR 210/t, while the forward curve remains gently upward sloping towards EUR 235/t by spring 2029. CBOT wheat firmed modestly on 12 June, with Jul 2026 near 590 USc/bu (≈ EUR 217/t) and Dec 2026 around 615 USc/bu (≈ EUR 226/t), keeping the transatlantic spread relatively stable.

Physical offers show Black Sea origins still competitive: FCA Ukraine (Kyiv/Odesa) wheat with 9.5–11.5% protein is indicated around EUR 0.23–0.25/kg (≈ EUR 230–250/t), while FOB French 11% protein wheat out of Paris is near EUR 0.30/kg (≈ EUR 300/t). US CBOT-aligned FOB offers around EUR 0.22/kg (≈ EUR 220/t) underscore that US Gulf remains price-sensitive but not aggressively undercutting Black Sea values.

Supply & Demand

For the EU, Expana now projects 2026/27 soft wheat output at 129.2 million tonnes, slightly above last month’s 128.8 million tonnes, confirming a broadly ample regional supply base. EU soft wheat exports in the current 2025/26 season (ending 30 June) were revised up from 27.3 to 27.9 million tonnes, and are expected to increase again in 2026/27 on the back of large carryover stocks and weaker anticipated competition from the US, Argentina and Canada.

In Germany, the DRV sees the 2026 wheat harvest down 2.2% year on year to about 22.63 million tonnes. However, recent welcome rains have improved yield prospects, lifting the estimate slightly above the May forecast of 22.57 million tonnes and easing earlier concerns over more pronounced weather damage.

Global Fundamentals & WASDE Takeaways

Global fundamentals remain relatively comfortable despite some localized tightening. World ending stocks for 2025/26 have been nudged up by about 0.74 million tonnes to nearly 280 million tonnes, while 2026/27 production is now seen at around 820 million tonnes, an increase of 1 million tonnes versus the previous estimate. Country-level adjustments include a 2 million tonne cut for Australia (to 28 million tonnes), offset by higher estimates for Russia (from 86 to 88 million tonnes), Ukraine (from 23 to 23.5 million tonnes) and Turkey (up 1.5 million tonnes to a record 22.5 million tonnes). The EU’s total wheat crop, including durum, remains pegged at 136 million tonnes.

In the US, the latest WASDE was more clearly supportive. The wheat crop forecast was cut by 18 million bushels to 1.543 billion bushels (about 42 million tonnes), driven largely by reductions in Hard Red Winter output in drought-affected parts of the southern Plains. US ending stocks for 2026/27 were also lowered by 18 million bushels to 744 million bushels, both figures coming in below average trade expectations and highlighting that US balance sheets are tightening even as the global balance stays comfortable.

Trade Flows & Demand Signals

The latest US weekly export report (week to 4 June) showed net wheat sales of 666,300 tonnes for the current marketing year, beating market expectations that ranged between 200,000 and 600,000 tonnes. This strong sales pace underpins demand for US wheat at current price levels and has helped limit downside in CBOT futures despite the broadly benign global stock picture.

At the same time, Russia, Ukraine and Turkey are set to remain significant exporters in 2026/27 thanks to upgraded production forecasts, keeping global buyers well supplied and capping the upside for benchmark prices. The EU’s improved export outlook suggests that European origins will also stay active in North African and Middle Eastern tenders, though quality spreads and freight will determine regional competitiveness.

Weather & Regional Outlook

Weather remains a key risk factor but, for now, recent precipitation in Germany has supported crop conditions, aligning with the slightly improved DRV forecast. In the US southern Plains, however, ongoing drought stress in parts of the Hard Red Winter belt underpins the lower national crop estimate and keeps a weather premium in that segment of the market.

In the Black Sea region, current forecasts point to generally seasonable conditions with local variability, which, combined with the upgraded production estimates for Russia and Ukraine, argue against a near-term supply shock. Market attention will remain on any heat or dryness spikes during critical grain-filling stages, which could quickly change sentiment.

Trading Outlook & Strategy

• For consumers: Use the current sideways-to-soft undertone in MATIF around EUR 200–210/t for Sep–Dec 2026 to extend coverage into early 2027, focusing on high-protein grades where US and EU supply looks relatively tighter.
• For producers: Consider incremental hedging on further rallies towards EUR 220–225/t on MATIF, given the comfortable global stocks and strong competition from Black Sea and Turkish origins.
• For traders: Watch US export pace and southern Plains weather closely; stronger-than-expected demand or a further downgrade in Hard Red Winter output could support CBOT spreads versus MATIF.

3‑Day Price Indication (Directional)