Wheat under pressure: profit-taking in Europe, stronger Russia, fragile crops

Recent profit-taking on Euronext has triggered a short-term correction in wheat, just as the EU cuts its export outlook and raises stock forecasts, signaling a more comfortable balance sheet. At the same time, Russia is lifting export projections, reinforcing competitive pressure on EU origins, while weather stress in the US Southern Plains and softening French crop ratings provide some fundamental support.

Wheat prices remain caught between ample global supply signals and mounting regional weather and demand risks. European soft wheat faces a loss of price competitiveness after recent rallies, prompting end-of-month selling and a downward revision of export expectations by the EU Commission. Higher projected EU harvests and stocks, plus a new upgrade of Russian export estimates, lean bearish for the medium term. Yet worsening US winter wheat conditions, only partially offset by a still decent French crop profile and robust US export demand, are helping to limit the downside for now.

📈 Prices & Market Sentiment

End-of-month profit-taking on Euronext wheat led to marked losses, as traders reassessed the recent rally in light of weaker export competitiveness for Western European wheat on the world market. The correction follows several sessions of price gains that had pushed EU values above key competitors, especially Black Sea origins.

Physical offers in Europe and the US broadly reflect this consolidation phase. FOB French wheat (protein 11.0%) around Paris is currently indicated near EUR 0.27/kg (about EUR 270/t), broadly flat versus the previous week. US wheat linked to CBOT, with 11.5% protein, trades around EUR 0.19/kg (roughly EUR 190/t), while Ukrainian wheat from Odesa remains sharper, near EUR 0.17–0.18/kg (EUR 170–180/t), underscoring the competitive gap.

Origin	Specification	Location / Term	Latest price (EUR/kg)
France	Wheat, protein min. 11.0%	Paris, FOB	0.27
USA	Wheat, protein min. 11.5% (CBOT-linked)	FOB	0.19
Ukraine	Wheat, protein min. 11.0%	Odesa, FOB	0.17

🌍 Supply & Demand Balance

The EU Commission has turned more cautious on export prospects while simultaneously upgrading production, pointing to a looser balance sheet. Soft wheat exports to third countries for 2025/26 are now seen at 27 million tonnes, down from 28 million tonnes previously. At the same time, the 2025 soft wheat harvest estimate was raised by 850,000 tonnes to 136.1 million tonnes, lifting ending stock projections from 14.7 to 16.6 million tonnes.

For 2026/27, the Commission trimmed projected soft wheat exports to 29.65 million tonnes, slightly below the 30 million tonnes previously expected, while increasing the EU soft wheat crop forecast from 125.9 to 127.3 million tonnes. This combination of lower exports and higher output implies persistent stock rebuilding and weighs on the medium-term price outlook for European wheat, especially if competing origins maintain aggressive pricing.

Russia is reinforcing its role as the dominant supplier. Consultancy SovEcon has raised its outlook for Russian wheat exports in 2025/26 by 0.9 million tonnes to 47.4 million tonnes and for 2026/27 by 1.4 million tonnes to 45.2 million tonnes. These upward revisions signal that global import demand is increasingly being met by Black Sea origins, further eroding the price power of Western European sellers and magnifying the impact of the EU’s weaker export projections.

📊 Fundamentals: Crops, Demand & Positioning

In France, soft wheat conditions have slipped but remain better than a year ago. As of 27 April, FranceAgriMer rated 81% of French soft wheat in good or excellent condition, down from 83% the previous week, but up from 74% at the same time last year. This suggests some weather-related pressure, but no broad-based crop failure, which fits with the EU’s higher production projections.

US fundamentals are more supportive. Traders expect the upcoming Crop Progress report to show further deterioration in winter wheat ratings, as dryness persists across the Southern Plains while the crop enters the critical grain-filling phase. Recent drought monitoring confirms that winter wheat and other small grains in parts of the Southern Plains remain stressed, with spring precipitation still the key swing factor for final yields. This production risk underpins Kansas and Chicago wheat markets despite the global surplus narrative.

Demand-side data are also constructive, especially in the US. The latest USDA weekly export report shows total wheat export commitments at 24.859 million tonnes, 15% above last year. This already represents 102% of the USDA’s current export projection and aligns with the five-year average performance at this point. In the week to 23 April, old-crop sales reached 226,100 tonnes, toward the upper end of expectations, while new-crop net sales amounted to 156,700 tonnes, indicating solid forward demand.

On the processing side, the USDA’s quarterly flour milling report indicates that US mills processed 222.4 million bushels of wheat into flour from January to March, 4.2 million bushels less than in the same period a year earlier. This points to slightly weaker domestic use, partially offsetting the strength in exports, but not enough to negate the overall tightening signal from trade flows.

Speculative money has noticeably shifted direction. The latest CFTC data show that managed money in CBOT wheat futures and options swung back to a net long position of 10,664 contracts in the week to 28 April, a change of 21,381 contracts toward the long side. In Kansas wheat, funds extended their net long by 2,615 contracts to 30,624 contracts. This repositioning reflects growing concern about weather risks and firmer demand, and increases the market’s sensitivity to both bullish and bearish news.

🌦️ Weather Snapshot

The key weather focus remains on the US Southern Plains, where ongoing dryness overlaps with winter wheat grain filling. While medium-range outlooks point to a tendency for wetter-than-normal conditions over parts of the southern US into spring, actual precipitation has so far lagged in several hard red winter wheat areas, and drought stress persists in pockets. Short-term forecasts keep volatility elevated, as any sustained shift to wetter conditions could quickly ease yield fears, while continued dryness would likely trigger further risk premiums.

In Western Europe, conditions are more mixed but broadly adequate. The slight deterioration in French ratings suggests that local weather has turned marginally less favourable, yet there is no widespread evidence of severe crop damage at this stage. For now, weather in Europe is a secondary price driver compared with demand, Russian exports and US Plains rainfall.

📆 Trading Outlook & Price Direction (Next 1–2 Weeks)

• Flat-to-slightly lower bias in Europe: Higher EU crop and stock forecasts and downgraded exports, combined with stronger Russian export projections, argue for a modestly bearish Euronext bias unless US weather deteriorates sharply.
• Supported but volatile US markets: Persistent dryness in the Southern Plains and strong export commitments should keep CBOT and Kansas wheat underpinned, but large fund longs increase correction risk on any improvement in rain forecasts or macro risk-off moves.
• Black Sea continues to cap rallies: Competitive Ukrainian and Russian FOB offers around EUR 170–180/t are likely to limit the upside for EU and US wheat, especially on nearby shipments.

🔎 Strategy Pointers

• Importers: Consider scaling into coverage on price dips in European or US wheat, using the current correction to extend coverage into Q4 2026 while monitoring US Plains weather closely.
• EU producers: With export prospects downgraded and stocks rising, use rallies triggered by US weather scares or macro risk events to hedge a portion of 2025/26 production rather than chase higher flat prices.
• Traders/funds: Given the rapid shift to net long in CBOT and Kansas wheat, favour a more tactical approach, pairing long US positions against short Euronext or Black Sea exposure to express relative weather risk while acknowledging global surplus.

📉 3-Day Regional Price Indication (Directional)

• Euronext / FOB France (EUR): Bias for sideways to slightly softer moves as the market digests heavier EU stocks and weaker export outlook.
• CBOT-linked US wheat (EUR-equivalent): Mildly supportive tone, with intraday volatility driven by each new US crop and weather update.
• Black Sea FOB (Ukraine, EUR): Stable to firm in EUR terms, but still at a discount to EU and US origins, maintaining strong competitive pressure on global tenders.