Wheat Futures Show Signs of Recovery

After weeks of pressure, wheat futures on the Chicago Board of Trade (CBOT) rose to $5,43-1/2 per bushel, bouncing back from their earlier low of $5,36-1/2 earlier this week. This rise caught some traders off-guard, as many had expected continued weakness due to the strong US dollar. Which has been making American wheat less attractive to global buyers. Surprisingly, improved weather patterns and easing edible oil prices played a role in stabilizing the market.

Dollar Strength Hurts Exports, But Not Everything Is Lost

The US dollar’s recent strength—it hit its highest in over a year—hasn’t done any favors for American wheat exporters. When the dollar gets stronger, US agricultural products automatically become more expensive for overseas buyers, which gives countries like Russia and Ukraine a serious edge. Their wheat is just...cheaper.

That said, some traders argue the price stabilization we’re seeing could mean global buyers are adapting. Or maybe they’re just willing to pay the premium for better-quality US wheat. (Still up for debate, honestly.)

Argentina and France Struggle to Keep Up

Meanwhile, in Argentina, droughts are wreaking havoc on wheat production. Their latest forecast shows a drop of about 0.7 million tonnes, leaving them with only 18.8 million tonnes for the 2024-25 season. In Europe, France is also cutting back its export expectations—down a whopping 40% compared to previous years. The numbers are sobering, and they’re a reminder that global wheat supplies can shift dramatically.

The big takeaway? If these production cuts continue, some markets might have to rely more on other suppliers, like the US, even if our wheat is pricier.

Rainfall Brings Hope to Key Regions

On a brighter note, much-needed rain finally arrived in North America and parts of the Black Sea region, giving farmers and traders a glimmer of hope. While it’s too early to say how much it’ll help with yields, the initial signs are positive. And in markets like this, positive news tends to ripple out quickly.

(Though let’s be real—Mother Nature isn’t always predictable, and we’ve learned that the hard way this year.)

Geopolitics Add to the Mix

The situation in the Black Sea region, always a wildcard, seems to be calming down a bit. This easing of tensions has removed some of the “war premium” from wheat prices, making things slightly more predictable—for now. Elsewhere, stability in soybean and corn markets has added a bit of balance to the broader agricultural scene, though wheat remains the focus for many traders.

(Side note: Anyone who says they can predict what’ll happen in the Black Sea next month is probably bluffing.)





Click here to reach our trading platfrom CMBroker