News

Michael

Mar 31, 2025

Wheat Futures Pressured by Weather and Weak Demand โ€“ CBoT Hits New Lows

Wheat Futures Pressured by Weather and Weak Demand โ€“ CBoT Hits New Lows

๐Ÿ“œ Wheat Futures Pressured by Weather and Weak Demand โ€“ CBoT Hits New Lows ๐Ÿ“œ

Wheat markets remained under pressure at the end of the week. Despite minor gains in Paris, the broader trend remains bearish. Improved crop conditions, weak global demand, and large short positions continue to weigh on sentiment, even as investors position themselves ahead of key USDA reports.




๐Ÿ“Š 1. Market Overview: Exchange Prices & Trends



๐Ÿ“Œ Wheat futures closed near multi-month lows as rainfall in key growing regions and low export activity weighed on prices.




๐ŸŒ 2. Key Market Drivers & Influencing Factors

๐Ÿ”น ๐Ÿ“‰ Weather Conditions Pressure Prices

๐Ÿ“Š Rainfall in key wheat regions of the U.S. and Russia along with favorable EU conditions have reduced weather risk premiums:
  • U.S. Plains, Russia, and parts of Eastern Europe report improved soil moisture
  • Short-covering has yet to materialize, keeping the market biased lower
๐Ÿ“Œ Traders see little urgency amid improving crop outlooks.

๐Ÿ”น ๐Ÿ“ˆ France: Crop Conditions Stable but Below Average

๐Ÿ“Š As of March 24, 74% of French soft wheat rated good/excellent, unchanged WoW
  • Higher than 66% last year, but still below the multi-year average
  • Durum wheat ratings slightly down from 81% to 80%
๐Ÿ“Œ Stability in French crop conditions limits upside potential.

๐Ÿ”น ๐Ÿ“‰ Russian Wheat Prices Rise Slightly

๐Ÿ“Š Russian wheat (11.5% protein, April/May delivery):
  • Up $2 to $244โ€“247/t FOB
  • French wheat is $4โ€“6/t cheaper, while Ukrainian, Romanian, and Bulgarian wheat trades $3โ€“5/t below Russian prices
๐Ÿ“Œ Black Sea competition remains fierce, limiting European export gains.

๐Ÿ”น ๐Ÿ“‰ Fund Positioning Still Bearish

๐Ÿ“Š CFTC data (as of March 25):
  • Net short in CBOT wheat rose by 11,919 contracts to 92,587 contracts
  • Kansas City short reduced by 1,213 contracts to 45,450 contracts
๐Ÿ“Œ Large speculative short positions increase the risk of sharp rebounds on adverse news.

๐Ÿ”น ๐Ÿ“Š USDA Reports in Focus

๐Ÿ“Š Traders await USDAโ€™s quarterly grain stocks and 2025 planting intentions (due March 31):
  • Grain stocks expected around 1.221 billion bu (range: 1.169โ€“1.26)
  • Last yearโ€™s March figure: 1.098 billion bu
  • Wheat acreage forecast: 46.475 million acres (range: 45.4โ€“47.815);analysts expect more winter wheat, less spring wheat and durum
๐Ÿ“Œ These reports could redefine price direction heading into Q2.




๐Ÿ”ฎ 3. Price Forecast (April 1โ€“3, 2025)



๐Ÿ“Œ Unless export activity improves or weather concerns resurface, downside pressure may persist into early April.




โ›… 4. 14-Day Weather Outlook โ€“ Key Growing Regions

๐Ÿ‡บ๐Ÿ‡ธ USA โ€“ Kansas, Oklahoma, Great Plains

๐Ÿ“ Current: Soil moisture improved, planting outlook firming๐Ÿ“† Forecast:
  • ๐ŸŒก๏ธ Mild temperatures, moderate rainfall
  • ๐ŸŒง๏ธ Continued moisture likely to support crop growth

๐Ÿ‡ท๐Ÿ‡บ Russia & ๐Ÿ‡บ๐Ÿ‡ฆ Ukraine โ€“ Black Sea Region

๐Ÿ“ Current: Rain in southern Russia, improving planting conditions๐Ÿ“† Forecast:
  • ๐ŸŒก๏ธ No frost risks, continued mild weather
  • ๐ŸŒง๏ธ Moderate rainfall to aid crop development
๐Ÿ“Œ Weather conditions continue to favor wheat growth โ€“ bearish for prices.




๐Ÿ“‰ 5. Long-Term Market Data: Fund Positioning & Export Trends

๐Ÿ“‰ Fund Positioning โ€“ CFTC (Week Ending March 25)

๐Ÿ“Š Global Wheat Export Overview




๐Ÿ“Œ 6. Conclusion & Strategic Recommendations

๐Ÿ“ Key Takeaways:โœ… Weaker demand and improved weather continue to pressure wheat pricesโœ… CBOT and Euronext hit multi-month lowsโœ… French and Black Sea wheat remains competitively pricedโœ… Speculative short positions remain large โ€“ the risk of short squeezes if weather shifts

๐Ÿ“Œ Strategic Recommendations:๐Ÿ”น Producers: Avoid panic selling; consider covering old crops on weather rallies๐Ÿ”น Buyers: Take advantage of dips, especially from non-Russian Black Sea origins๐Ÿ”น Traders: Positioning ahead of USDA data will be key โ€“ volatility expected

๐Ÿ“ All eyes are now on USDAโ€™s March 31 reports and further developments in Black Sea trade logistics.
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