📜 Wheat Futures Rebound Modestly – China Weather Risks and Short Covering Provide Support 📜

Wheat prices firmed slightly on Tuesday, led by gains in contracts for the 2025 harvest on Euronext and CBOT. Short covering by funds and heat concerns in China’s key wheat-growing region helped lift prices, though strong supply fundamentals in the U.S., EU, and Russia continue to limit upward momentum.

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📊 1. Market Overview: Exchange Prices & Trends

📅 Contract	💰 Closing Price	📉 Change	📊 % Change
Euronext Sep 2025	€205.50/t	+€3.25	+1.61%
CBOT Jul 2025	536.00 ct/bu (€176/t)	+4.75 ct	+0.90%

📌 After Monday’s losses, both exchanges saw recovery driven by weather concerns and speculative activity.

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🌍 2. Key Market Drivers & Influencing Factors

🔹 📈 Funds Cover Shorts on Technical Bounce

📊 Commodity funds:

• Took advantage of recent lows to close short positions
• The rally was largely technical, as fundamentals remain soft

📌 Speculative activity was the primary driver of Tuesday’s price recovery.

🔹 🔥 China Heat Warning Raises Supply Concerns

📊 China’s Henan province (1/3 of national wheat production):

• Heat warning issued for May 11–13
• Temperatures are expected to exceed 35°C, risking heat stress on crops

📌 China holds large stocks, but a poor harvest could trigger imports later this year.

🔹 📊 Russia Raises 2025 Output Forecast

📊 IKAR (Moscow-based consultancy) now expects:

• 2025 wheat output: 83.8 Mt (up from 82.5 Mt)
• 2025/26 wheat exports: 41.3 Mt (up from 40 Mt)

📌 Stronger Russian production outlook reinforces bearish mid-term sentiment.

🔹 🌾 U.S. Crop Conditions Continue to Improve

📊 USDA Crop Progress (Apr 29):

• 51% of winter wheat rated good/excellent (+2 pp Wow)
• Best rating for this time of year since 2020
• Drought area shrinks to 23%, from 33% last week

📌 U.S. wheat outlook remains strong, keeping gains in check.

🔹 📦 EU Export Momentum Improves Slightly

📊 EU Commission data (to May 4):

• EU soft wheat exports: 17.81 Mt (–34% YoY)
• Weekly increase: +174,000 t
• Germany: 2.20 Mt
• Morocco now EU’s #1 customer: 2.60 Mt
  ↳ Surpassed Nigeria (2.41 Mt)
• Weekly Morocco sales: 133,000 t (previous week: 117,000 t)

📌 Morocco remains a rare bright spot in an otherwise slow export season.

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🔮 3. Price Forecast (May 8–10, 2025)

📅 Contract	🔮 Expected Range
Euronext Sep 2025	€203 – €207/t
CBOT Jul 2025	534 – 541 ct/bu (€175–€177/t)

📌 The market may remain range-bound until export rumours are confirmed or weather risks escalate.

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⛅ 4. 14-Day Weather Outlook – Key Regions

🇨🇳 China – Henan Province

📍 Current: Rising heat stress
📆 Forecast:

• 🌡️ Heatwave (May 11–13): +35°C
• 🌧️ Very limited rainfall

📌 Weather here could influence global demand if crop stress worsens.

🇺🇸 USA – Plains

📍 Current: Strong ratings
📆 Forecast:

• 🌧️ Continued improvement in soil moisture
• 🌡️ Stable growing conditions

🇪🇺 EU – Western and Central Europe

📍 Current: Improving conditions
📆 Forecast:

• 🌧️ Rainfall supports crop recovery
• 🌡️ Seasonal temperatures aid growth

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📉 5. Market Data Highlights

📍 Region	📉 Net Short Position	🔄 Weekly Change
CBOT Wheat	89,929 contracts	–6,510
KC Wheat	56,624 contracts	+9,252

🌍 Export Prices (FOB, USD/t)	🇺🇸 U.S. SRW (Gulf)	🇺🇦 Ukrainian (11.5%)
May 2025	$228–232 (€201–205)	$239–242 (€211–214)

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📌 6. Conclusion & Strategic Recommendations

📍 Key Takeaways:
✅ Tuesday’s gains were mostly technical, led by fund activity
✅ Weather stress in China helped stabilise sentiment
✅ Russia’s production upgrade and strong U.S. crop weigh on outlook
✅ EU export pace remains slow despite Moroccan demand

📌 Recommendations:
🔹 Producers: Use rallies to lock in sales if conditions stay favourable.

🔹 Buyers: Monitor Moroccan and North African demand as a signal for price shifts
🔹 Traders: Keep close watch on Chinese weather and export tenders from Egypt & Morocco

📍 Wheat remains vulnerable to weather surprises, but heavy supply and improving global crops cap upside.