The international wheat market is facing strong headwinds this week, as significant harvest pressure and improving geopolitical conditions have driven prices lower at major exchanges. On Euronext, the front-month wheat contract (August) tumbled by €3.75 to close at €204.25 per metric ton, while losses at the Chicago Board of Trade (CBOT) were even sharper: Soft Red Winter wheat fell by 15 cents to settle at 552.75 cents per bushel. These declines reflect mounting supply-side stress, with the Northern Hemisphere harvest ramping up and concerns around Middle East tensions receding.

Attention remains keenly focused on the Russian crop, where output estimates have increased, but dryness in core regions like Rostov and Krasnodar has triggered local emergencies and could cap yield potential. Meanwhile, the latest USDA export inspections and slow US harvest pace underscore a lacklustre demand and logistical challenges. European weather remains a wild card, with persistent dryness threatening wheat in France and the Benelux, even as the EU MARS report modestly raised yield outlooks for Southern Europe. Speculative short positions are being covered, but futures remain heavy amid stiff competition from competitively priced Russian wheat.

📈 Prices

🌍 Supply & Demand

• Russia: 2025 production now seen at 84.8 Mt (Argus), up 4.5 Mt from prior; SovEcon projects the lowest summer wheat area in a decade (11.8 Mha).
• US: Wheat export shipments (week ending June 19): 254,782 t, down 34% w/w and 26% y/y. Cumulative new marketing year exports: -20% vs. last year.
• EU: MARS report lifts soft wheat yield forecast to 6.08 t/ha, up from 6.04 t/ha. Concerns are rising over drought during grain filling in northern France/Benelux.
• Ukraine: Domestic and FOB prices soft, pressured by high competition from Russian-origin wheat and uncertain Black Sea logistics.

📊 Fundamentals

• Growing harvest pressure as winter wheat combines roll in the US, EU, and the Black Sea.
• Russian seaborne wheat maintains a steep price discount to Western origins, capping EU and US rally potential.
• USDA Crop Progress: Only 19% of US winter wheat harvested (vs. 28% avg). Good/excellent ratings: 49% for winter, 54% for spring (down 3 points each).
• Speculative activity: Funds reduced large net short CBOT wheat by ~12.7k contracts to 81.4k net short. Kansas City also saw short covering.

🌤️ Weather Outlook

• Europe: Persistent dryness in France and Benelux threatening kernel fill; continued hot/dry weather expected next 7 days, increasing yield loss risk.
• Russia: While the rainy season has started in some regions, southern districts such as Krasnodar and Rostov remain under official drought alerts. Yield estimates are stable for now, but at risk if heat persists.
• US Plains: Storms cause harvest delays. Wetter pattern will slow combines in Kansas/Texas; northward, mostly favourable, but some spring wheat moisture stress possible in Dakotas/Minnesota.

🌐 Global Production and Stocks

💡 Trading Outlook: Key Recommendations

• Bears retain control; consider defensive hedges if exposed to further downside during peak Northern Hemisphere harvest.
• Monitor Black Sea weather. A prolonged drought could limit Russian yields and spark short covering.
• Exporters should watch for new business if Russian FOB values stabilise or harden.
• Buyers: Wait for further price weakness or opportunistic coverage should EU/US weather threaten quality.
• Specs: Tighten stops, as volatility risk rises near the July WASDE and with speculative short interest still large.

📆 3-Day Regional Price Forecast