Wheat Market Analysis: Record Production Meets Weather Risks and Bearish Sentiment

The global wheat market stands at a pivotal moment as the USDA’s May World Agricultural Supply and Demand Estimates (WASDE) report projects record-breaking production for the 2025-26 season. Wheat output is forecast to reach an all-time high of 808.5 million tonnes, with significant recoveries in the European Union and Canada, and steady gains in Russia. However, this optimism is tempered by persistent dryness across key growing regions—including northern Europe, the US Hard Red Winter belt, Ukraine, and Russia—which threatens to cap yields and could make current USDA estimates the season’s peak unless weather conditions improve. Meanwhile, international buyers remain cautious, purchasing only as needed and contributing to a bearish market sentiment as funds continue to sell futures on expectations of higher carry-out stocks. While the USDA’s numbers suggest ample supply, the market remains highly sensitive to weather developments, with any deterioration potentially triggering a sharp reversal in sentiment. In this environment, both producers and consumers must remain vigilant, as the interplay between robust production forecasts and mounting weather risks will likely define price direction in the coming months.

📈 Prices

Exchange/Location	Type	Protein (%)	Delivery Terms	Latest Price (USD/kg)	Previous Price	Weekly Change	Sentiment
Odesa (UA)	Wheat	11.50	FCA	0.25	0.26	-0.01	Bearish
Kyiv (UA)	Wheat	11.50	FCA	0.24	0.24	0.00	Neutral
Kyiv (UA)	Wheat	9.50	FCA	0.23	0.23	0.00	Neutral
Odesa (UA)	Wheat	9.50	FCA	0.24	0.25	-0.01	Bearish
Washington D.C. (US, CBOT)	Wheat	11.50	FOB	0.23	0.22	+0.01	Bullish
Paris (FR, Euronext)	Wheat	11.00	FOB	0.27	0.26	+0.01	Bullish
Odesa (UA)	Wheat	11.00	FOB	0.21	0.20	+0.01	Bullish
Odesa (UA)	Wheat	10.50	FOB	0.21	0.20	+0.01	Bullish
Odesa (UA)	Wheat	12.50	FOB	0.22	0.21	+0.01	Bullish

🌍 Supply & Demand

• Global production for 2025-26: 808.5Mt (record high, +1.1% YoY)
• Total supply (with carry-in): 1,073.7Mt (+4.9Mt YoY)
• EU output: 136Mt (+11.4% YoY, +3% vs 5-year avg)
• Canada: 36Mt (+2.9% YoY, +12% vs 5-year avg)
• Russia: 83Mt (+1.7% YoY, -3% vs 5-year avg)
• Major exporters’ carry-out stocks: Higher YoY, pressuring prices
• International trade: Expected to increase, but buyers remain hand-to-mouth

📊 Fundamentals & Market Drivers

• USDA WASDE report: Bearish for wheat, projecting ample supply and higher carry-out
• Speculative positioning: Funds continue to sell futures, adding downward pressure
• Weather risks: Persistent dryness in key regions (northern Europe, US, Ukraine, Russia, India, China, Australia)
• Government statements: India and China downplay crop issues, but market remains skeptical
• Harvested area: EU (+6% YoY), Canada (+2% YoY), Russia (-2% YoY)

🌦️ Weather Outlook & Yield Risks

• Northern Europe: Ongoing dryness threatens yield recovery despite increased acreage
• US Hard Red Winter Belt: Dry conditions persist, risk to output if rains do not improve soon
• Ukraine & Russia: Moisture deficits continue, with Black Sea analysts warning USDA may be too optimistic
• Canada: Favourable soil moisture and advanced spring planting—potential for upside if conditions hold
• India & China: Officially downplaying issues, but reports of weather-related stress persist
• Australia: Poor outlook in some regions

🌏 Global Production & Stocks Comparison

Country/Region	2025-26 Production (Mt)	2024-25 Production (Mt)	5-Year Avg (Mt)	YoY Change
World	808.5	799.7	792.0	+1.1%
EU	136	122	132	+11.4%
Canada	36	35	32	+2.9%
Russia	83	81.6	85.5	+1.7%

📆 Trading Outlook & Recommendations

• Monitor weather developments closely—further dryness could trigger a sharp rally.
• Short-term sentiment remains bearish due to high carry-out and fund selling.
• Buyers may continue hand-to-mouth approach until weather risks materialize.
• Producers should consider hedging a portion of new crop at current levels.
• Watch for revised forecasts from the USDA in case of persistent adverse weather.

🔮 3-Day Regional Price Forecast

Exchange/Location	Current Price (USD/kg)	3-Day Forecast	Trend
CBOT (US)	0.23	0.22 – 0.24	Sideways/Bearish
Euronext (Paris, FR)	0.27	0.26 – 0.28	Sideways/Bullish if weather worsens
Odesa (UA)	0.25	0.24 – 0.26	Sideways