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Michael

Mar 28, 2025

Wheat Market: Euronext Rebounds While US Futures Remain Under Pressure

Wheat Market: Euronext Rebounds While US Futures Remain Under Pressure

Wheat Market: Euronext Rebounds While US Futures Remain Under Pressure

After three consecutive days of losses, wheat futures in Paris recovered modestly on Wednesday. In contrast, US markets continued to decline, weighed down by favourable weather forecasts and geopolitical signals.




๐Ÿ“ˆ Market Overview & Price Development

At Euronext, the May contract gained 1.75 EUR, closing at 222 EUR/t. This marks a partial recovery from the multi-month lows reached earlier in the week. Support came from a weaker euro, improving export competitiveness, and increased interest from bargain hunters.

In the US, prices for Soft Red Winter wheat fell further. The May contract at the Chicago Board of Trade (CBoT) dropped 8 cents to 535.25 ct/bu, equivalent to approximately 183 EUR/t โ€“ a new contract low.




๐ŸŒ Key Market Drivers

๐ŸŒฆ๏ธ Weather in the US:

  • Rainfall is forecasted across key winter wheat regions in the coming days, offering relief to areas affected by drought.
  • Soft Red Winter wheat zones are expected to benefit the most.
  • In Hard Red Winter wheat states like Kansas, conditions remain mostly dry, except for some rain in central and southern Texas. This helped limit losses on the Kansas exchange.

โš–๏ธ Black Sea Ceasefire:

  • News of a ceasefire agreement between Ukraine, Russia, and the US for the Black Sea corridor created downward pressure on US markets.
  • However, Russia insisted on preconditions for the truce, casting doubt on its immediate implementation.
  • European traders remain unfazed, noting that Black Sea grain shipments have been largely stable for over 18 months. Attacks on port infrastructure โ€“ not included in the ceasefire โ€“ continue to pose a more significant risk.





๐ŸŒ Export Price Snapshot (FOB, April/May)




๐Ÿ’ผ Fund Positioning (Euronext)

According to Euronext data released on Wednesday, financial investors and commodity funds have reduced their net short positions in wheat futures and options:
  • Previous week: 193,667 contracts
  • Now: 185,959 contracts
  • โž A sign of reduced bearish pressure.





๐Ÿ—“๏ธ Upcoming Data & Market Expectations

  • Today: USDA weekly export sales reportโž Expected range (2024/25): 0 to 550,000 tonsโž New crop: 100,000 to 300,000 tons
  • Monday: USDA Grain Stocks Report (as of March 1)โž Bloomberg consensus: 1.221 billion buโž Range: 1.169 to 1.26 billion buโž Last year: 1.089 billion bu โž Est. +12% YoY increase





๐Ÿ”ฎ Short-Term Outlook & 3-Day Forecast

  • Euronext (MATIF): Some room for further recovery, driven by euro weakness and reduced short positions.
  • CBoT: Weather-driven pressure is likely to persist in the short term.
3-Day Price Outlook (EUR/t, May contract):โžก๏ธ 222 โ†’ 224 โ†’ 226




๐ŸŒฆ๏ธ 14-Day Weather Trend (Key US Growing Areas)

  • Soft Red Winter (Illinois, Indiana): Mild and rainy
  • Hard Red Winter (Kansas, Oklahoma): Mostly dry
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