Wheat Prices Stabilise on Fund Short-Covering – Algerian Purchase Adds Optimism
Wheat futures steadied on both sides of the Atlantic on Wednesday. Chicago gained modestly on fund short-covering, while Paris remained mostly unchanged. Algeria’s large wheat purchase briefly lifted market sentiment, though Black Sea origins are expected to dominate.
📊 1. Market Overview: Exchange Prices & Weekly Trends
🌍 2. Key Market Drivers
🔹 Fund Short-Covering Supports Prices
- Financial investors continued to cover short positions after prices hit fresh lows earlier this week.
- Sentiment was also supported by Algeria's wheat purchase of ~660,000 t, though most will likely come from Black Sea origins.
🔹 FranceAgriMer Revises Export Outlook
- French soft wheat exports (non-EU): Raised to 3.2 Mio t (from 3.1 Mio t)
- EU shipments: 6.55 Mio t (+130,000 t vs April)
- Ending stocks revised down to 2.63 Mio t (previous: 2.81 Mio t)
- Still lowest export year since 1996/97
🔹 CBoT Recovers Slightly
- Soft and Hard Red Winter gained on short-covering, while Spring Wheat slipped due to favourable planting conditions
🚢 3. Export & Trade Developments
🌍 Algeria Buys Big, France Likely Sidelined
- Algeria’s OAIC purchased ~660,000 t in an international tender.
- Diplomatic tensions between Algeria and France may exclude French wheat despite attractive pricing.
🇪🇺 EU Exports Still Sluggish
- Total EU soft wheat exports 2024/25: 18.3 Mio t (▼33% YoY)
- Germany: 2.323 Mio t (+130,000 t Wow)
- Hope remains for demand from West Africa
🔬 4. Crop Conditions & Weather Update
🇺🇸 Kansas Wheat Tour – Day 2
- HRW yield estimate: 53.3 bu/ac (↑ from 42.4 bu/ac in 2024)
- 5-year average: 42.3 bu/ac
- Disease risk rising: Wheat Curl Mite & Mosaic Viruses
🌦️ Weather Snapshot
- USA: Rain forecast for SRW regions, but dryness persists in HRW belt
- EU: Mild & dry in Central Europe; showers in Western zones expected
- Black Sea: Recent rainfall is easing earlier drought concerns
📉 5. Speculative Positioning
🔮 6. Price Forecast (Next 3 Days)
📌 7. Summary & Recommendations
📍 Key Points
- Short-covering activity helped stabilise prices
- Algerian tender adds optimism, though France may not benefit
- Kansas tour yields promising early results, but disease risk looms
- Export outlook for EU wheat remains bleak despite slight revisions
✅ Actionable Insight
- Sellers: Use small rebounds to hedge Q4 delivery
- Buyers: Monitor Algeria, Morocco, and Egypt tender results
- Traders: Prepare for potential volatility from USDA export data today
