Wheat Markets Under Pressure: Mixed Trends at Euronext and CBoT
The wheat market started the week on a weaker note, with CBoT wheat declining, while Euronext futures remained stable.
Euronext Wheat: Modest Gains Amid Export Concerns
At Euronext (MATIF), wheat prices rose slightly:
- March 2025: +2.00 EUR to 234.50 EUR/t
- May 2025: +2.75 EUR to 238.75 EUR/t
- September 2025: +2.00 EUR to 230.50 EUR/t
While export competitiveness remains a challenge, traders welcomed signs of steady demand. The 50-day moving average (SMA50) remains intact, supporting technical bullish sentiment.
CBoT Wheat Falls – Strong Dollar and Weak Exports Weigh on Prices
The Chicago Board of Trade (CBoT) wheat futures fell across the board, with the March 2025 contract dropping 4.75 ct to 554.75 ct/bu (195.88 EUR/t). Other contracts also saw declines:
- May 2025: -5.25 ct to 567.00 ct/bu
- July 2025: -6.00 ct to 578.25 ct/bu
- December 2025: -4.75 ct to 612.25 ct/bu
Key Factors Behind the Decline:
- Strong US Dollar: Higher USD value makes US wheat less competitive in global markets.
- Weak Weekly Export Data: US wheat export sales for the week ending January 23 totalled 456,086 t, barely meeting expectations.
- Technical Selling: Investors took profits after last week’s rally.
Global Market Developments
Ukraine’s Wheat Exports Rise 18.5%
- Ukraine exported 25.35 million tons of grains and legumes this marketing year, 9.5% more than last year.
- Wheat exports surged to 10.7 million tons, an increase of 1.67 million tons (18.5%) from the previous year.
- Barley and rye exports also rose, with 2.06 million tons of barley and 10,800 tons of rye shipped.
Algeria to Maintain Wheat Imports at 9 Million Tons
- Algeria plans to keep its wheat acreage at 2 million hectares, with barley at 1 million hectares.
- Weather conditions remain dry, which could affect yields.
- Wheat production is expected to reach 3 million tons, up from 2.7 million tons last year.
- Algeria remains a major wheat importer, with projections of 9 million tons of wheat and 0.7 million tons of barley.
EU Proposes Additional Tariffs on Russian and Belarusian Agriculture Imports
- The EU Commission plans to expand tariffs on Russian and Belarusian agricultural products and nitrogen-based fertilizers.
- Goal: Reduce dependency on Russian imports and weaken Russia’s revenue streams.
- Potential Impact: Higher fertilizer costs for EU farmers but reduced competition from Russian grain.
Russia’s Wheat Export Forecast Reduced
- SovEcon lowered its forecast for Russia’s wheat exports by nearly 1 million tons to 42.8 million tons for this season.
- Tighter supply in Russia may offer price support to global wheat markets in the coming months.
Market Outlook
- Euronext maintains stability, while CBoT faces bearish pressure.
- Ukraine and Russia remain major influences, with Ukraine’s rising exports and Russia’s reduced forecast shaping global supply.
- Algeria’s demand for wheat remains strong, providing support for European exporters.
- US wheat market faces challenges, with a strong dollar limiting competitiveness.
- Technical indicators show mixed signals, with potential support levels forming after this correction.
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