Wheat Market Update: Global Trends, Weather Risks, and Price Developments

Wheat markets remain volatile as weather concerns in Russia and the U.S. collide with weaker global demand. The latest WASDE report highlights lower global wheat stocks, but export prospects remain uncertain. Meanwhile, European wheat prices find support, while U.S. wheat futures retreat on softer demand from China. Here’s what’s moving the markets today.

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1. Wheat Prices – Euronext & CBoT

Euronext (MATIF) Wheat

Chicago Board of Trade (CBoT) Wheat

🔹 Conversion Note:1 bushel (bu) = 27.216 kg, meaning the latest CBoT March contract at 576 ct/bu equals 211.3 EUR/t.

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2. WASDE Report Highlights

The latest WASDE report from the USDA released on February 8, 2025, provided minimal changes to global wheat supply and demand but highlighted some key trends:

• Global wheat ending stocks cut to 257.6 million tons, down 1.22 million tons from January.
• EU wheat exports were cut to 28 million tons (-1 million), reflecting weaker demand.
• U.S. ending stocks fell by 4 million bushels, but remain 14% higher than last year.
• China’s wheat imports lowered to 8 million tons, raising concerns over U.S. exports.
• Argentina’s wheat production forecast was revised, while Australian output remains weak due to drought.

📌 Market Impact: The reduction in global stocks is bullish for prices, but lower demand—especially from China—could limit gains.

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 3. Weather & Production Updates

Russia – Winter Wheat Risk Intensifies

Russia’s main wheat-growing regions—the Volga, Central Black Earth, and Southern districts—are facing cold stress and dry conditions:

• Volga & Central Black Earth: Low precipitation and colder temperatures increase winterkill risks.
• Southern Russia: Colder-than-average temperatures in the next 14 days could damage unprotected crops.
• IKAR revised its Russian wheat production estimate down to 82 million tons, citing weather risks.
• Russian export quotas starting February 15 may tighten global supply.

United States – Mixed Weather Signals

• Kansas, Oklahoma, and Texas (Hard Red Winter Wheat Region): Drier conditions persist, but no major freeze damage confirmed yet.
• Midwest & Northern Plains: Snow cover protected winter wheat, limiting crop losses.
• Drought Concerns: Some parts of the Southern Plains may struggle with moisture shortages heading into spring.

Europe – Favorable Conditions

• France’s wheat acreage increased to 4.57 million hectares, 10% higher than last year.
• Germany and Poland’s wheat crops remain in good condition, but wet weather could delay spring planting.

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4. Export & Trade Developments

• Algeria’s Wheat Tender (50,000 tons) – Decision Pending:
  • France hopes to regain market share, but Russia remains the main supplier.
  • If Algeria shifts back to French wheat, it could support Euronext prices.
• Russian Export Prices:
  • 12.5% Protein Wheat (FOB Black Sea): $240-243/t
  • 11.5% Protein Wheat: $237-238/t
  • Argentinian Wheat (11.5% Protein): $232-236/t
  • Russian exporters expected to slow sales due to tight margins and lower quotas.

📌 Market Impact: EU wheat needs stronger demand to counteract weak exports, while Russia’s supply concerns could support global prices.

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5. Market Outlook & Key Takeaways

✅ Bullish Factors (Price Support)

• Lower global wheat stocks (257.6 million tons).
• Cold weather risks in Russia could reduce crop yields.
• Russian export quotas tightening supply.
• EU wheat production outlook remains strong.

❌ Bearish Factors (Price Pressure)

• Weaker demand from China.
• U.S. wheat exports face challenges.
• EU export slowdown (28 million tons).
• No major winterkill damage in the U.S..

📌 Conclusion:The wheat market remains finely balanced, with weather risks in Russia and lower global stocks supporting prices, but weaker exports limiting gains. Traders will closely watch:

• Algeria’s wheat tender outcome.
• Updated Russian weather forecasts.
• U.S. export sales reports on Thursday.

Wheat

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