Wheat Futures Mixed Amid Supply Concerns and Market Volatility

Wheat futures closed mixed, with Kansas City HRW contracts gaining while Chicago SRW and Minneapolis spring wheat declined. U.S. wheat markets faced downward pressure, driven by global supply concerns, weak export demand, and geopolitical uncertainties. Recent rainfall in the Plains has not significantly alleviated overall dryness or improved deteriorating crop conditions. The near-term forecast includes precipitation in some Plains areas and heavy rainfall further east, which could influence crop progress.

The USDA’s national crop progress reports will begin next Monday, offering further insights into planting conditions. Additionally, the USDA projected lower-than-expected U.S. wheat planting intentions, adding to market volatility. CBOT wheat futures fell 1.58% to $5.32 per bushel, marking their steepest daily drop since March 24. Meanwhile, French milling wheat futures hit multi-month lows, reflecting weak global demand. Euronext wheat remained stable, with May futures settling at 222.00 euros per ton.

In Russia, SovEcon reported the first increase in bids for 12.5% wheat at deep-sea ports since mid-February, reaching 17,600–18,000 rubles per metric ton. This rise is driven by growing exporter demand and tight supply, with Russian wheat stocks down 34% year-on-year as of March 1. Stocks in key export regions have plummeted 56%, exacerbating supply constraints. Despite strong exports, Russian wheat prices declined by $2 to $250–$254 per metric ton FOB, following global price trends. The strengthening ruble has pushed local bidding prices to a multi-year high of $211 per ton.

Ukraine’s wheat exports remain steady, with April projections at 1 million metric tons following 1.1 million metric tons in March. While European demand is stagnant, Ukrainian wheat continues to flow to key buyers like Egypt. However, the reintroduction of EU duties in June could limit access to European markets. Analysts expect Ukrainian wheat prices to drop by up to $20 per ton by July due to market saturation but may recover to $220–$235 per ton by late 2025. Domestic flour mills currently offer the highest prices, providing an alternative sales channel for farmers amid sluggish export demand.

Market volatility has increased ahead of U.S. President Donald Trump’s expected tariff announcement, which could impose sweeping reciprocal duties that may disrupt agricultural trade. The potential for tariffs on Canadian wheat imports has added further uncertainty to North American wheat markets. The USDA’s weekly wheat export sales report, due Thursday, is expected to show either net reductions or modest increases in sales, reflecting ongoing global trade uncertainties.

The wheat market outlook suggests potential downside risks due to weak global demand, geopolitical uncertainties, and trade policy concerns. In terms of price direction, a bearish scenario could see wheat futures drop toward $5.10–$5.15 per bushel if weak exports persist and global demand does not improve. A neutral scenario suggests that prices may hover around $5.25–$5.35, fluctuating based on U.S. crop reports and geopolitical developments. However, a bullish scenario could push wheat futures toward $5.45–$5.50 if weather risks intensify or global demand strengthens.

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

Resistance : 532.50, 533.04, 533.92

Support : 530.74, 530.20, 529.32

1H Outlook

Source: TradingView 

Buy/Long 1 If the support at the price range 529.34 - 530.74 is touched, but the support at 530.74 cannot be broken, the TP may be set around 533.14 and the SL around 528.64, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 532.50 - 533.90, TP may be set around 535.44 and SL around 530.04, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 532.50 - 533.90 is touched, but the resistance 532.50 cannot be broken, the TP may be set around 530.74 and the SL around 534.60, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 529.34 - 530.74, TP may be set around 527.60 and SL around 533.20, or up to the risk appetite.       

Pivot Points Apr 3, 2025 03:44AM GMT