Wheat Prices Dip as Weather Relief, Export Hesitancy, and Fund Covering Shape Sentiment

Amid shifting weather outlooks and evolving export dynamics, the international wheat market is currently marked by increased volatility and shifting sentiment. This week, futures prices on both Euronext (MATIF) and CBOT remained under pressure for a third consecutive session, driven by optimism in improving growing conditions in the US southern Plains and renewed concerns about export competitiveness. Notably, rainfall forecasts are expected to ease dryness in key wheat-producing regions of the US, while above-average temperatures will promote crop development. The improved weather prospects have directly led to a downturn in US wheat futures, which in turn negatively impacted European prices. Additionally, European traders observed that last week’s price uptick could further hinder the already subdued export business—particularly as North African buyers secured large volumes from Black Sea and Balkan origins, with French wheat losing out due to ongoing diplomatic strains.

Market positioning by financial investors is also influencing price direction: recent Euronext data reveals significant short-covering among funds, stoking a brief uptrend last week before the renewed slide. Meanwhile, fundamentals continue to see a reshuffling—Russian export forecasts have been trimmed for the current season, but are set higher for the next. All eyes now turn to the imminent USDA export sales report, with traders anticipating modest old crop sales and limited interest in the new crop. Given these drivers, participants should brace for further price swings as weather headlines and geopolitical factors continue to steer the market.

📈 Prices

Euronext (MATIF) Milling Wheat Futures (EUR/t)

Contract	Last	Change (%)	Volume	Open Interest
Mar 26	193.25	0.00	1	19460
May 26	197.75	0.00	52	258253
Sep 26	202.50	0.00	88	87114
Dec 26	208.50	0.00	1	75276

CBOT Wheat Futures (US-Cent/bu)

Contract	Last	Change (%)	Volume	Open Interest
Mar 26	577.00	+0.92	2	1460
May 26	576.25	+0.30	16	236040
Jul 26	583.75	+0.30	26	122073
Sep 26	595.25	+0.34	19	39082

ICE Feed Wheat (GBP/t)

Contract	Close	Change (%)
Mar 26	164.45	-0.15
May 26	168.00	-0.15
Jul 26	171.55	-0.15

🌍 Supply & Demand

• Southern US Plains weather: Favorable rain expected to relieve drought and accelerate crop development, pressuring prices.
• Export demand headwinds: Rising prices last week seen as further curbing EU export competitiveness, amid weak demand environment.
• Algeria tender: Purchased ~600,000 t wheat (~220 €/t), mainly to be sourced from Ukraine, Romania, Bulgaria; ongoing tensions exclude French wheat despite EU origin competitiveness.
• USDA sales report: Anticipated old crop export sales of 250,000–500,000 t; new crop 0–50,000 t, signaling moderate international buying.
• Financial investor positioning: Notable reduction in Euronext net-short positions from 63,181 to 37,702 contracts last week, triggering some short-term price support.

📊 Fundamentals

• Russian exports: Sovecon lowered the Russian 2025/26 wheat export forecast from 45.7 to 45.4 million t, citing reduced price competitiveness; however, a rebound to 41.7 million t expected in 2026/27 after a prior downward move.
• Export origins: Black Sea and EU wheat currently favored by North African buyers, while French wheat remains sidelined due to trade/political headwinds.
• Speculative activity: Fund short covering (Euronext) explained last week’s brief rally; current loss of momentum reflects fading speculative support and return of export worries.

🌦️ Weather Outlook

• US Southern Plains: Commodity Weather Group expects rains to ease soil moisture deficits by next week; warm weather likely to spur crop growth, improving yield potential and capping upside risk for prices in short term.
• Black Sea Region: No major adverse reports, exports from Ukraine, Romania, and Bulgaria proceeding normally.

🌐 Production & Stocks Snapshot

Country	2025/26 Export Forecast (mln t)	Market Role
Russia	45.4	Largest global exporter, short-term lower competitiveness
Ukraine	High (exact est. N/A)	Key Black Sea supplier to Africa, c&f trades ongoing
EU (excl. FR)	N/A	Major supplier to North Africa, especially Romania/Bulgaria
USA	N/A	Rain and warm weather to support crop health

🔎 Market Offers Snapshot

Origin	Type	City	Delivery	Price (EUR/t)
Ukraine	Protein min. 11.5%	Odesa	FCA	0.25
Ukraine	Protein min. 11.5%	Kyiv	FCA	0.24
Ukraine	Protein min. 9.5%	Odesa	FCA	0.24

📆 Trading Outlook & Recommendations

• • Monitor US plains weather: Ongoing rainfall and mild temps may limit near-term upside for futures.
  • Export tender outcomes crucial: Track final Algerian buy flows and further tenders for signals on regional grain shifts and EU competitive position.

<liCaution on speculative moves: With net shorts shrinking, future fund repositioning could trigger sharp bounces or renewed pressure.

• Geopolitics impact French/EU flows: Sound risk management if exposed to French origin positions due to persistent trade headwinds.

 

🔮 3-Day Price Forecast

Exchange	Contract	Forecast Range	Sentiment
Euronext	May 26	196–199 EUR/t	Bearish to neutral, dependent on export news
CBOT	May 26	570–580 USc/bu	Slightly bearish, as rains boost crop outlook
ICE	May 26	167–170 GBP/t	Stable to weak, tracking global leads