Wheat Market Update: Stability in Europe, Pressure in the US

Euronext Wheat Market

The March wheat contract on Euronext gained slightly on Wednesday, closing at €232.75 per ton, up €0.50. The price remains near the seven-week high recorded on Monday. In contrast, wheat on the U.S. market fell for the second consecutive day, with the March contract on the Chicago Board of Trade (CBOT) dropping 3.75 cents to a contract low of 541.25 cents per bushel (€192/t).

Key Market Factors

• EU Wheat: The European wheat market is supported by expectations of a weaker Russian harvest in 2025, declining export volumes, and rising prices for Russian and Ukrainian wheat.
• U.S. Wheat: Growing competition from Australia and Argentina is a concern. Both countries have recorded better-than-expected wheat harvests and offer competitive prices in Latin American and Asian markets. These developments have increased pressure on U.S. and Canadian wheat exports.
• Weather Impact: The U.S. market received some support from unfavourable weather forecasts for winter wheat in central and southern Midwestern states, notably Kansas. Dry conditions expected in the coming weeks could harm crops and reduce yields.

EU Wheat Outlook

Although a price rally for EU wheat appears unlikely in the short term, prices may consolidate at current levels. Upside potential exists if weather conditions deteriorate in the Northern Hemisphere. A key supporting factor for European wheat prices is the shrinking wheat inventories in Russia and Ukraine, which are expected to limit export volumes in the second half of the marketing year.

Ukrainian customs data reveal a significant slowdown in wheat shipments:

• October 1–14: 796,000 tons exported
• November 1–16: 460,000 tons exported
• December 1–18: 313,000 tons exported

Since the start of the 2024/25 marketing year, Ukraine has exported 9.3 million tons of wheat. With a total export quota of 16.2 million tons agreed between traders and the government, only 6.9 million tons can be shipped by June 30, 2025.

French Wheat Export Projections

FranceAgriMer has revised its forecasts for French soft wheat exports:

• Non-EU exports: Reduced from 3.9 million tons to 3.5 million tons for 2024/25.
• Intra-EU exports: Increased from 5.9 million tons to 6.16 million tons, just 2% below the 2023/24 volume.

Germany remains a key market for French wheat within the EU. Rising French wheat imports could pressure German spot markets, especially with logistical challenges such as the Moselle River lock closure. The damaged lock is expected to be repaired by March, potentially shifting French deliveries to the final quarter of the marketing year.

U.S. Weekly Export Data

The USDA is set to release its weekly export sales report today. The market expects wheat sales for:

• 2024/25: 225,000–550,000 tons
• 2025/26: 0–50,000 tons

Conclusion

European wheat markets are holding steady amid global competition and logistical challenges. Meanwhile, U.S. markets remain under pressure from Australian and Argentine competition, with weather conditions adding uncertainty to the outlook. Further export data and weather forecast developments will be critical for future price movements.

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