🌾 Wheat Markets Stabilise After Volatile Week – Drought in Ukraine Raises New Concerns
Wheat futures showed mixed behaviour after a week of losses and geopolitical uncertainty on 6 May 2025. CBOT July wheat slightly declined to 529.00 ct/bu (≈177.40 EUR/t), while Euronext wheat remained unchanged across all contracts. Despite the calm appearance, market risks are rising again due to escalating dryness in Eastern Europe and military tensions in the Black Sea.
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📊 Futures Summary – Closing Prices (06.05.2025)
🇺🇸 CBOT Wheat Futures – USD ct/bu
| Contract | Close | Change | EUR/t (approx.) |
|---|---|---|---|
| Jul 25 | 529.00 | -0.42% | 177.40 |
| Sep 25 | 543.75 | -0.37% | 182.30 |
| Dec 25 | 566.00 | -0.35% | 189.60 |
| Mar 26 | 585.50 | -0.26% | 196.20 |
| May 26 | 596.25 | -0.29% | 199.80 |
(Conversion: 1 bu = 27.216 kg, 1 USD = 0.93 EUR)
🇪🇺 Euronext Wheat Futures – EUR/t
| Contract | Close | Change |
|---|---|---|
| Sep 25 | 202.25 | 0.00% |
| Dec 25 | 212.50 | 0.00% |
| Mar 26 | 219.00 | 0.00% |
| May 26 | 223.75 | 0.00% |
🌦️ Weather and Fundamentals
🚨 Ukraine Drought Risk Intensifies
– UGA warns that if dryness persists through mid-May, wheat production could fall 10–15% below current 22.5 Mt forecast.
– World AgWeather sees below-average rainfall in the next 14 days.
– USDA already estimates just 17.9 Mt, the lowest in over a decade.
🌍 France: Crop Condition Stable
– According to FranceAgriMer, 74% of soft wheat remains in good/excellent condition, unchanged week-on-week.
– This is well above last year’s level of 63%.
🪖 Geopolitics: Black Sea at Risk Again
⚠️ Over the weekend, Ukrainian drones attacked the Russian port of Novorossiysk, damaging a grain terminal.
– 5 people were injured according to Russian sources.
– Escalation raises concerns over Black Sea grain logistics.
📊 Impact: Traders are closely watching any supply disruptions, especially as the export competition with Russia intensifies.
📉 CFTC Data – Hedge Funds Extend Shorts
| Exchange | Net Short (Contracts) | Change from Prior Week |
|---|---|---|
| CBOT Wheat | 121,415 | ▲ +31,486 |
| KC Wheat | 67,269 (record high) | ▲ +10,645 |
📌 This is the largest speculative short in wheat since May 2023, highlighting the pessimistic positioning in U.S. wheat markets.
⚖️ Export Market Overview (03.05.2025)
| Origin | Protein | FOB Price (USD/t) | Delivery |
|---|---|---|---|
| Russia | 11.5% | 239–240 | May–June |
| France | std. | ~233–234 | May–June |
| U.S. (SRW) | std. | 221–225 | FOB Gulf |
📉 U.S. wheat is the cheapest globally, while Russian wheat remains dominant despite political tensions.
🔮 Outlook & Strategy
- 📉 Bearish bias remains for Chicago wheat due to record short positioning and ample global supply.
- ⚠️ Watch the weather in Ukraine and northern France – any further drought signs could shift sentiment quickly.
- 📊 Euronext may lag in reaction due to lower fund participation and local fundamentals.
📌 Recommendations:
- Buyers: Consider taking small coverage near EUR 200–205/t for Q4 delivery.
- Sellers: Avoid panic selling – geopolitical risk may offer rebound opportunities.
- Traders: Monitor fund short-covering potential; the market is heavily sold.
📍 Summary:
Wheat markets appear calm, but under the surface, dryness, war risk, and speculative extremes are setting the stage for increased volatility.
