Wheat Markets Sink to Contract Lows – Pressure from U.S. Weather and Sluggish Demand

Wheat prices continued to decline on Friday, with U.S. futures reaching new contract lows amid favourable weather and weak global demand. Despite a minor rebound in Paris for harvest positions, the market remains under pressure from abundant global supply and lacklustre export interest.

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1. Market Overview: Exchange Prices & Trends

Contract	Closing Price	Change	Weekly Change
Euronext Sep 2025	€202.75/t	+€0.25	–€4.75 (–2.3%)
CBOT Jul 2025	521.75 ct/bu (€170/t)	–7.5 ct	–21.25 ct (–4.9%)

Prices dropped to multi-year lows across both exchanges.

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2. Key Market Drivers & Influencing Factors

Weather Improves in Key Regions

• U.S. southern Plains see improved rainfall
• Showers are also reported in southern Russia and the Black Sea
• Northern China remains hot and dry, which is supporting global prices slightly

Weather conditions remain the dominant factor pressuring futures.

China Purchases Wheat Amid Domestic Heat Stress

• Estimated purchases: 400,000–500,000 t from Australia and Canada
• Henan province, a major wheat region, is experiencing drought and heat

China may dip into reserves or increase imports if crop losses mount.

U.S. Crop Outlook Improves

• Winter wheat in “good/excellent” condition: 51%
• Drought area down to 23% (from 33% the week before)

Better conditions further pressure Chicago prices.

EU Market Under Pressure

• Euronext wheat near contract lows
• Domestic demand is present, but export flows remain subdued
• Inland rerouting of port wheat to meet domestic needs in Germany
• Older contracts are still being fulfilled for Morocco, Angola, and Cameroon

Weaker euro provided brief support; otherwise, sentiment remains bearish.

Speculative Pressure from Funds

CFTC (May 6):

• CBOT wheat net shorts reduced by 7,681 contracts to 113,734
• KC wheat net shorts expanded to a record: 72,240 contracts (+4,971)

Hedge funds remain net short, but profit-taking triggered partial covering.

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3. Price Forecast (May 13–15, 2025)

Contract	Expected Range
Euronext Sep 2025	€200 – €204/t
CBOT Jul 2025	516 – 528 ct/bu (€168–172/t)

The short-term bias remains bearish unless crop stress emerges or China accelerates buying.

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4. 14-Day Weather Outlook – Key Growing Regions

USA – Southern Plains

Current: Well-timed rainfall, favourable temps
Outlook:

• More precipitation expected
• Mild, stable growing conditions

China – Northern Wheat Belt

Current: Hot and dry in Henan and neighbouring provinces
Outlook (May 11–18):

• Temps above 35°C
• Very limited rainfall

Europe – Central & Northern Regions

Current: Light rain in west; dry in northeast
Outlook:

• Mostly dry in Germany, Denmark, Poland, and the Czech Republic
• Mild, with warmth expected late May

Risk of crop stress rising in parts of Europe if dryness persists.

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5. Market Data Highlights

Exchange	Net Short Position	Weekly Change
CBOT Wheat	113,734 contracts	–7,681
KC Wheat	72,240 contracts	+4,971

FOB Export Prices (USD/t)	U.S. SRW	Ukrainian Wheat
May 2025	$228–232 (€201–205)	$239–242 (€211–214)

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6. Conclusion & Strategic Recommendations

Key Takeaways:
Improved crop prospects in the U.S. and Black Sea pressured prices
China’s weather problems offer only marginal support
Euronext remains near multi-year lows amid poor export performance
Fund behaviour continues to shape short-term price action

Recommendations:
Producers: Be cautious with forward selling; use rebounds to hedge
Buyers: Monitor the Black Sea and the EU for discount opportunities
Traders: Watch USDA’s first 2025/26 WASDE (out today) for fresh direction

Volatility may increase if Chinese crop concerns escalate or USDA surprises with stock or acreage shifts.