After a brief rally in late April, futures on the Euronext (MATIF) have dropped more than €10/ton from their highs, with the September 2025 contract now standing around €202/t. Rain across Central and Northern Europe has alleviated fears of drought-induced crop losses, but long-term precipitation deficits persist and soil moisture reserves remain low, leaving crop yield potential exposed to further weather volatility—especially if June brings another spell of heat and dryness, as some meteorologists warn.

On the other side of the Atlantic, US winter wheat harvest prospects are solid and new crop sowings benefit from near-optimal conditions, dependent on June rainfall materializing as forecast. Abundant global supply expectations and sluggish demand from key importers—most notably China, which cut its 2024/25 import demand by over 10 million tons versus earlier USDA forecasts—have dampened export business and pressured prices in all major origin countries. The effects have been stark: Australian and French wheat shipments to China have slumped, and overstocks may force aggressive liquidation before the next harvest, amplifying downward price pressures.

The coming weeks will be defined by weather developments in Europe and the Black Sea, China’s unpredictable import policy, and speculative positioning in futures markets. Risks are also rising on the cost side: Russian growers are feeling the squeeze from a stronger ruble, and price levels near production costs across many exporting countries could limit plantings for the next season. While prices could drift lower toward €180/t on MATIF if crop conditions remain benign, any adverse weather could trigger sharp rallies. As always, proactive risk management and vigilance are essential in this volatile landscape.

📈 Prices at Major Exchanges

🌍 Supply & Demand Overview

• Europe: Recent rains eased immediate drought fears, but persistent sub-average precipitation and low soil moisture keep risks elevated. Price drop reflects improving outlook, yet vulnerability remains if June turns hot/dry.
• USA: Winter wheat crop looks promising; summer wheat sowings benefit from excellent conditions, but final yield will hinge on June rainfall. Harvest prospects are positive, boosting supply expectations.
• Australia: Weak Chinese demand is prompting stock build-ups; new crop production is seen at 28–34 million tons. Potential overhang in global supplies for 2025/26 if exports remain sluggish and inventories swell.
• China: Dramatically reduced wheat imports (USDA: 3.5Mt in 2024/25, down from 11Mt forecast, and 13.5Mt actual in 2023/24). Much of the demand is met by stock drawdowns—future import strategy is highly unpredictable.
• Other Key Producers: Argentina and India both expect bumper harvests. Good planting/monsoon rains boost global production outlook.

📊 Market Fundamentals

• Inventory Trends: Global stocks are comfortable, but big shifts are possible depending on Chinese import behaviour and Australian liquidation.
• Speculative Positioning: Interest waning, with funds cautious as supply optimism grows.
• Price Risks: Prices are hovering near production costs for many exporters. Further declines could curb sowings forthe  2026 harvest.
• Regional Pressures: Russian currency appreciation squeezes margins, potentially impacting future plantings/export competitiveness.

🌦️ Weather & Crop Yield Outlook

• Europe: Showers this week support short-term crop prospects, but France remains drier than average. Soil moisture deficits persist, making the region sensitive to June’s weather pattern—another hot/dry spell could cut yields and inflate prices rapidly.
• North America: June rainfall is crucial. Good early-season conditions, but any shortfall could challenge yield potential in spring wheat areas.
• Australia: Normal winter rainfall required to sustain yield optimism; dry spells could force revisions lower.
• Argentina & India: Planting conditions near ideal; weather risks currently low for both.

🌏 Production & Stocks: Key Comparisons (2024/25)

💡 Trading Outlook & Recommendations

• Short-term: Remain cautious. Any weather scare (especially in June for the EU/Black Sea) could spark rallies; otherwise, prices may slide further.
• Producers: Consider forward selling a portion of production on rallies. Price levels are dangerously close to production costs in many areas.
• Buyers: Be patient, but monitor the weather closely. Use dips to lock in coverage if adverse weather emerges.
• Speculators: Volatility likely to pick up—weather, Chinese buying, and export flows are key triggers. Consider spread strategies to hedge event risk.
• Watch for potential policy signals from China and the impact of continued weak exports on Australian and European stocks.

🗓️ 3-Day Regional Price Forecast

• Euronext (Sep 25): €200–205/t — Neutral/bearish bias unless further dryness emerges in France.
• CBOT (Jul 25): 530–545¢/bu — Rangebound, awaiting confirmation on US rain.
• ICE Feed Wheat (Jul 25): 156–159 £/t — Slightly pressured, lagging MATIF and CBOT trends.

Global Wheat FOB Price Highlights