Wheat Market Analysis: Mixed Signals but Persistent Upside Amid Supply Strains & Weather Volatility

The global wheat market is currently navigating a key seasonal transition, with the Ukrainian sector exemplifying both the uncertainties and opportunities facing global supply chains. While the traditional ‘off-season’ lull characterizes current trade activity, the impending new harvest has positioned Ukraine as a noteworthy focal point. Analysts from the Pusk cooperative of the All-Ukrainian Agrarian Council report that most of the 2024 old-crop wheat has cleared the market, with only faint demand keeping prices at bay. After a brief softening last week, market sentiment improved quickly, reflecting optimism about future price trends.

Several external factors frame this outlook. Internationally, wheat supply is shrinking due to persistent weather risks in leading producing nations like Russia and the United States. This has firmed bullish price expectations, especially as Ukraine’s export competitivity is challenged by EU trade restrictions that now include tariffs and quotas. Local farmers are gradually shifting their focus to Asian markets, where robust demand in countries such as the Philippines, Indonesia, Vietnam, and Bangladesh is absorbing surplus tonnage. Market watchers anticipate that these dynamics, combined with a tight supply backdrop, may allow wheat prices to climb steadily in the coming weeks, with forward curves hinting at price levels as high as $260/ton in the second half of the year.

Farmers and traders are advised to monitor weather developments closely, as lingering drought in the US Plains and excessive rains in parts of Europe could further amplify volatility. Immediate recommendations favor patience, with spot supply low and incremental price gains likely over the near term.

📈 Prices & Market Sentiment

Origin	Type	Protein (%)	Location	Delivery Terms	Latest Price (USD/kg)	Weekly Change	Sentiment
US (CBOT)	Standard	11.5	Washington D.C.	FOB	0.23	0.00	Stable
FR (Euronext)	Standard	11.0	Paris	FOB	0.27	0.00	Stable
UA	Standard	11.0	Odesa	FOB	0.20	0.00	Stable
UA	Standard	12.5	Odesa	FOB	0.21	0.00	Firm
UA	Standard	11.5	Kyiv	FCA	0.25	+0.01	Upward

• Ukrainian prices show slight week-on-week increases for high-protein wheats (up $0.01/kg).
• US and EU prices remain flat, underlining cautious spot market sentiment.
• FOB offers from Ukraine remain highly competitive versus EU and US origins.

🌍 Supply & Demand Drivers

• Old harvest stocks largely exhausted in Ukraine, leading to low spot supply.
• Trade flows shifting from EU (limited by tariffs/quotas) to high-demand Asian markets.
• Global inventories tightening due to adverse weather in Russia & US.

📊 Fundamentals & Market Drivers

• USDA reports continue to cut projections for Russian, US, and Australian crops due to weather risk (drought, flooding).
• Ukraine transitions to pre-war EU trade regime—expect slower exports to Europe, more competition in Asia.
• Speculative funds holding a net-long position across main wheat exchanges, underpinning bullish sentiment.
• Ukrainian analysts forecast prices for third-class wheat at $230–240/ton in early fall, rising up to $260/ton later in the season.

🌦️ Weather Outlook & Regional Impact

• US Plains: Persistent dryness threatening new season yields. Weather models project below-normal rainfall next week. Yield risk moderately high.
• Southern Russia/Black Sea: Variable conditions, but recent hot spells have lent further stress to developing crops.
• Western Europe: Recent heavy rains hampering fieldwork; potential for localized yield losses in France and Germany.
• Ukraine: Generally favorable, but intermittent localized dryness. No major frost/damage incidents detected.

🌐 Global Production & Stock Comparison

Country	2024/25 Output (mln t)	2023/24 Output (mln t)	Ending Stocks (mln t)
Russia	82	92	14
US	47	50	15
EU	130	133	45
Ukraine	21	22	2.5
Australia	29	35	6

• Year-on-year output forecasts lower for nearly all major exporters.
• Import nations (Egypt, Bangladesh, Indonesia) projected to maintain strong buying interest, especially in Asian origins.

📆 Trading Outlook & Recommendations

• Patience warranted for Ukrainian sellers: spot supply is low, with prices likely to trend $2–3/ton higher weekly.
• Exporters should intensify marketing efforts in Asia, given restricted EU access.
• End-users (millers, feed producers) might consider forward coverage to lock in still-moderate prices before the fall rally.
• Monitor fund positioning and weather updates closely for fresh opportunities/risks.

⏩ 3-Day Regional Price Forecast

Exchange/Origin	Current (USD/kg)	3-Day Forecast	Trend
CBOT (US)	0.23	0.23–0.24	Steady to slightly up
Euronext (FR)	0.27	0.27	Stable
FOB Odesa (UA)	0.20–0.21	0.21–0.22	Upward momentum

• Minor gains expected in Ukrainian wheat due to tight supply and export redirection.
• US/EU: Stable, but risk of short-term volatility if weather issues worsen.