Global Wheat Market Faces Rising Production, Trade Shifts, and Price Volatility

The global wheat market is experiencing a combination of rising production, shifting trade dynamics, and price fluctuations. While global production estimates have increased for Argentina, Australia, Russia, and Ukraine, world wheat ending stocks have also grown. However, trade flows remain volatile—exports declined for the EU and Russia but increased for Australia. Concerns persist regarding U.S. winter wheat conditions and the upcoming spring wheat planting, as well as weather developments across Europe and the Black Sea region. 

In the U.S., wheat prices have declined due to profit-taking and technical selling, with ending stocks rising as a result of higher imports and lower exports. The USDA's March report maintained the overall supply and demand outlook, raising wheat ending stocks by 25 million bushels to 819 million, while imports increased to 140 million bushels and exports fell to 835 million. The season-average farm price was lowered to $5.50 per bushel. On a global scale, wheat supplies are projected to rise to 1,066.7 million tons, driven by increased stocks in Turkey and higher production. Despite rising consumption, global trade is expected to decline, particularly due to a sharp reduction in China’s wheat imports. 

India’s wheat production is forecast to reach a record 115.3 million metric tons in the 2024-25 crop year, reflecting a 2% increase. Wheat sowing expanded to 32 million hectares, exceeding the five-year average, while government procurement is expected to rise by 26% to 31 million metric tons. Current wheat stocks exceed buffer requirements, and the government continues market interventions to stabilize prices. Meanwhile, Ukraine’s wheat market experienced slight price declines, particularly for feed wheat, due to downward export trends, though milling wheat prices remained stable amid limited supply. 

Turkey’s wheat outlook remains uncertain, as March and April rainfall will be crucial for production. The Turkish Grain Board (TMO) reported sufficient wheat stocks for domestic needs and revised its sales policy, limiting sales to domestic users while maintaining an import ban until May. Turkey’s wheat production stands at 20.8 million metric tons, a 5.5% decline from last year, though past record imports have bolstered domestic supplies. 

In the U.S., wheat futures saw gains on Monday but faced some weakness on Tuesday, declining by 2 to 7 cents. The USDA’s Export Inspections report showed a sharp 44.65% drop in weekly wheat shipments, with Mexico as the largest destination. Despite this, total shipments for the marketing year remain 17.78% higher than last year.

European wheat futures edged lower, influenced by a stronger euro, with May wheat on Euronext dropping 0.2% to 223.25 euros per ton, near a six-month low. The euro’s appreciation reduced the competitiveness of European wheat in international markets. Additionally, the European wheat market is closely monitoring an Algerian import tender, which may offer export opportunities. However, Russian wheat prices have fallen, and political tensions between Algeria and France could hinder French wheat sales. U.S. and Argentine wheat are also competing for the tender, though higher Chicago prices have made them less competitive. 

UK feed wheat futures rose yesterday, with the May-25 contract closing at £176.40/t, up £1.20/t, and the Nov-25 contract increasing by £2.25/t to £191.50/t, leaving new crop futures at a £15.10/t premium over old crop. Price gains were supported by strong global grain markets, with Chicago wheat and Paris milling wheat futures rising 2.0% and 0.9%, respectively. Dry weather concerns in Russia and the U.S. were key drivers, though economic uncertainty and currency fluctuations remain factors to watch. 

Wheat prices continue to trend upward, nearing the $568.50/t target, supported by a previously completed double-bottom pattern. Further upside potential exists, with prices possibly reaching the $580.00/t level in the near term.

Data for Technical Analysis (1H) CFD US Wheat Futures - May 25 (ZWK5)

Resistance : 561.10, 561.39, 561.87

Support : 560.14, 559.85, 559.37

1H Outlook   

Source: TradingView

Buy/Long 1 If the support at the price range 559.14 - 560.14 is touched, but the support at 560.14 cannot be broken, the TP may be set around 561.24 and the SL around 558.64, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 561.10 - 562.10, TP may be set around 563.00 and SL around 559.64, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 561.10 - 562.10 is touched, but the resistance 561.10 cannot be broken, the TP may be set around 559.99 and the SL around 562.60, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 559.14 - 560.14, TP may be set around 558.20 and SL around 561.60, or up to the risk appetite.       

Pivot Points Mar 12, 2025 05:46AM GMT