Wheat Market: Cautious Recovery Amid Uncertainties for the 2025 Harvest

Market Movements

• Euronext (Paris):
  • March futures increased by 0.25 EUR to 227.50 EUR/t, gaining 6 EUR (+2.7%) over the week.
  • The December contract fell slightly by 0.75 EUR to 216.50 EUR/t.
• CBoT (Chicago):
  • March futures declined by one cent to 557.25 cents/bu (194 EUR/t) but recorded a weekly gain of 9.25 cents (+1.6%).

Russia: Critical Conditions for the 2025 Harvest

• Planting and Condition:
  • Winter wheat acreage has significantly decreased due to low prices and dry soil conditions.
  • Over one-third of the planted areas are in poor condition (either failed to germinate or weakly developed).
• Harvest Forecast:
  • Argus Media estimates Russia's 2025 wheat crop at 81.5 million tons (2024: 81.3 million tons).
• Measures and Export Tax:
  • Russia raised its export tax by over 30% to 49.30 USD/t (4,871.5 RUB/t) to curb high export volumes.
  • Despite a smaller crop, Russian wheat exports this marketing year have exceeded the previous year’s levels.

Outlook in Other Regions

• Ukraine:
  • 2025 wheat harvest forecast: 23.7 million tons (+6% compared to 2024).
• France:
  • 86% of winter wheat is in excellent condition (+9 percentage points YoY).
  • 96% of planned areas have been planted (2024: 87%; 5-year average: 93%).
• USA:
  • Winter wheat conditions have improved significantly after a challenging start.
  • Excellent yields in 2024 are likely to repeat in 2025.
• North Africa:
  • Persistent drought continues to impact the region.
• India and China:
  • Favourable weather and high prices encourage planting wheat without significant issues.

Financial Investors and Market Dynamics

• CBoT (Chicago):
  • Net short positions on wheat increased by 10,268 contracts to 69,386 contracts (the highest since August).
• Kansas City:
  • Net short positions rose by 7,769 contracts to 38,430 contracts.

Conclusion

Global wheat markets display mixed trends, with uncertainties in Russia and North Africa counterbalanced by stable USA, China, and India conditions. Current prices reflect expectations of high global production, but adverse developments could lead to sharp price increases. Investors remain cautious, with increased short positions suggesting an anticipation of continued price pressure.

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