Wheat market consolidates as WASDE and weather cap upside

Wheat remains in a consolidation phase at low price levels, with solid crop prospects in Europe, the Black Sea and Argentina limiting upside while the market waits for fresh direction from the new WASDE and US export data. The near-term picture is shaped by comfortable supply signals and cautious speculative flows. Coceral has raised its soft wheat crop estimate for the EU and UK, while Argentina’s Rosario exchange sees a larger 2026/27 harvest. Weather in key Northern Hemisphere producers remains generally favourable, and a recent heatwave in France is not expected to have damaged yields. At the same time, non-commercial traders have sharply flipped from net long to net short on Euronext wheat, underscoring the bearish tone, even as higher energy prices lend some support.

Prices

Physical and futures markets are broadly stable to slightly firmer but remain historically low. Recent offer indications for standard qualities are around 0.22 EUR/kg FOB US Gulf (CBOT-linked, protein 11.5%), 0.30 EUR/kg FOB France (Paris, protein 11.0%) and 0.19 EUR/kg FOB Odesa for Ukrainian 11.0% protein wheat, all modestly higher than late May levels.

Supply & Demand

Coceral has lifted its forecast for the 2026 soft wheat crop in the EU and UK from 142.6 to 143.7 million tonnes, citing good conditions in South-East Europe and Germany and limited impact from the latest French heatwave. This reinforces the picture of a comfortable European balance sheet and adds pressure to export competitiveness against the Black Sea.

In South America, the Rosario Grain Exchange increased its estimate for Argentina’s 2026/27 wheat crop to 20 million tonnes, up from 18–19 million tonnes previously. Combined with solid prospects in Russia and Ukraine, global export availability for the coming season looks ample, curbing any sustained price rally unless weather or geopolitics deteriorate markedly.

Fundamentals & Positioning

Speculative positioning on Euronext milling wheat has turned decisively bearish. Non-commercial traders moved from a net long of 50,324 contracts to a net short of 18,118 contracts in the week to 5 June, reflecting profit-taking on earlier geopolitical risk premiums and growing confidence in new-crop supply.

These flows follow heavy long-building at the onset of the Iran conflict, which has since been unwound. Renewed fighting and greater uncertainty around a potential US–Iran peace agreement could trigger a partial rebuilding of long positions, but for now the market is dominated by comfortable stock expectations and benign weather, with only higher oil prices offering a modestly supportive input-cost and biofuel linkage.

Weather & WASDE focus

Weather in the EU, Russia and Ukraine remains broadly favourable, supporting yield potential and justifying the upward revisions in crop forecasts. A recent heat episode in France is not expected to have materially harmed output, limiting any weather-driven risk premium in Euronext futures.

Attention now turns to the imminent WASDE report. US wheat production is expected by surveyed analysts at around 1.555 billion bushels, slightly below May, while 2025/26 ending stocks are seen around 941 million bushels, up 6 million versus May. For 2026/27, traders anticipate a drawdown to roughly 764 million bushels, still marginally above last month’s projection, pointing to only a gradual tightening in US balances.

Trade & Exports

US weekly export sales data due on Thursday for the week to 4 June will provide further guidance. For the final days of the 2025/26 marketing year (ending 31 May), traders expect net cancellations of up to 100,000 tonnes or modest net sales up to 100,000 tonnes, underlining a subdued finish to the old-crop campaign.

For the new 2026/27 year, expected US wheat sales are in the 200,000–600,000 tonne range. With abundant European and Black Sea supplies and a larger Argentine crop on the horizon, price competition in key import markets is likely to remain intense, especially if freight and energy costs stay supported by higher oil prices.

Trading outlook

• Importers: Consider extending coverage modestly on price dips ahead of the WASDE and US export data, as current EUR-based FOB levels remain historically low but weather and geopolitical risks persist.
• Exporters / Producers: Use any WASDE- or weather-driven rallies to layer in additional sales for 2026/27, given rising EU, Black Sea and Argentine supply estimates.
• Traders / Funds: With speculative positions now net short, watch for short-covering opportunities if the WASDE surprises with lower US output or if the Iran conflict escalates and spills over into energy and freight markets.

3-day price indication (directional)

• Euronext milling wheat (EUR): Sideways to slightly weaker as strong EU crop outlook caps rallies pending WASDE results.
• FOB Black Sea 11–12.5% (EUR): Stable to marginally softer, reflecting good Russian/Ukrainian crop conditions and strong competition.
• FOB US Gulf (EUR): Mostly stable, tracking CBOT and the new WASDE; modest upside risk if US production or stocks surprise lower.