Wheat Markets Navigate Global Supply Swell: Prices Steady, Risks Loom

The wheat market is currently marked by remarkable calm and resilience under the weight of record global supplies. Despite persistent price pressure from immense exportable surpluses—especially out of Argentina and Australia—key wheat futures at Euronext, Chicago Board of Trade (CBOT), and ICE UK have shown limited volatility. European cash bids slipped marginally, reflecting cautious buying from exporters amid competitive offers from South America, notably driven by Argentina’s record yields and Australia’s near-record harvest. Financial investors are treading lightly, having already trimmed short positions, signaling diminished expectations for further rapid price declines. Meanwhile, challenges remain: persistently low Argentinian export prices are curbing European and U.S. competitiveness, while Black Sea logistics risk is translating into higher insurance costs, creating localized price advantages for EU wheat. Weather in major producing regions has remained broadly supportive—though close attention remains on the southern hemisphere harvest and any late-season surprises. For market participants, these dynamics suggest stability but warrant readiness for potential shocks stemming from geopolitical, meteorological, or policy factors. Below, a detailed breakdown clarifies critical markers and strategic moves as the wheat market closes the year on a balancing act between ample stocks and simmering risks.

📈 Wheat Prices at Key Exchanges

Contract	Exchange	Last Price	Weekly Change	Sentiment
Mar 26	Euronext (MATIF)	185.75 EUR/t	Stable	Neutral
May 26	Euronext (MATIF)	188.50 EUR/t	Stable	Neutral
Mar 26	CBOT	509.50 USc/bu	Unchanged	Neutral
May 26	CBOT	520.50 USc/bu	+0.19%	Mildly Bullish
Jan 26	ICE UK Feed Wheat	162.45 GBP/t	-0.55%	Bearish

🌍 Supply & Demand Drivers

• Global Supplies: Argentina’s wheat harvest revised up to 27.7 Mt by Rosario board (with Buenos Aires exchange holding at 25.5 Mt). Australia forecasts 35.6 Mt wheat crop (3rd highest ever), both well above 5-year averages.
• Weak Export Prices: Argentina is currently the cheapest major supplier, pressuring EU and US offers and leading to lower export bids in France and Germany.
• Speculative Activity: CFTC data (Nov) indicates short-covering by funds, suggesting limited further downside expected by investors in the near term.
• Black Sea Risks: Ongoing vessel and port attacks raise insurance premiums but have yet to materially disrupt supplies; could turn into upside price risk if logistics are hindered.
• USDA Reports: December WASDE raised Argentina wheat crop estimate to 24 Mt, up from 22 Mt, reflecting strong Southern Hemisphere yields.
• Export Sales: US weekly wheat export sales expected between 300,000 and 750,000 tonnes in newest USDA data.

📊 Wheat Market Fundamentals

• EU & Black Sea: Large surpluses, EU exports supported by premium over Black Sea due to logistics costs; no export duties from Russia until late December.
• Australia: Minor downward revisions but still a massive wheat crop; barley and canola also above historic averages.
• CFTC Positioning: Managed money net short positions shrinking: -10,070 contracts (CBOT) and -13,278 contracts (Kansas), signaling waning bearish momentum.
• Inventories/Stocks: No shortages observed; all major exporters above 5-year averages following banner crops.

🌦️ Weather Outlook

• Argentina: Harvest 60% complete; average yield of 4.14 t/ha. Weather remains favorable for finishing harvest.
• Australia: Mild corrections in forecasts; overall positive conditions. No significant weather threats in short term.
• Northern Hemisphere: Dormancy period ongoing with average soil moisture; no major cold snaps expected in coming week for US or Europe.

🌐 Global Production & Stocks Comparison

Country	2025/26 Output (Mt)	YOY Change	Stock Situation
Argentina	25.5 – 27.7	↑ (+20% vs. prev.)	Above average
Australia	35.6	↑	Third highest ever
EU-27	~130 (est.)	Flat	Ample
Russia	92 (est.)	Flat/Up	Large exportable surplus
US	49 (est.)	Flat/Up	Stock rebuild in progress

🚩 Strategic Trading Outlook & Key Insights

• • Prices heavily capped by record Southern Hemisphere supply; any rallies likely short-lived barring weather or political surprise.
• • EU and US exporters face tough competition from cheap, high-volume Argentinian and Australian supplies.
• • Monitor Black Sea shipping situation—logistics shocks could abruptly impact price centers and export premiums.
• • Spec position data suggests short-covering is mature, reducing risk of forced selling but also lessening snapback potential.
• • Buyers: Good opportunities to secure forward physical at modest values in Q1–Q2 2026.
• • Sellers: Lighten inventory on strength, focus on quality and origin differentiation, especially for EU premium.
• • Watch USDA and Southern Hemisphere yield data for last-minute adjustments affecting Q1 flows.

📆 3-Day Regional Price Forecast (Key Exchanges)

Exchange	Contract	Today	+1 Day	+2 Days	+3 Days
Euronext	Mar 26	185.75 EUR/t	185.5 – 186.5	185.0 – 187.0	185.0 – 187.5
CBOT	Mar 26	509.5 USc/bu	507 – 511	506 – 512	505 – 513
ICE	Jan 26	162.45 GBP/t	162 – 163	161.5 – 163.5	161 – 164