Wheat markets ease, as Wasde rethink encourages profit-taking
• Brent crude eases, as hopes for Iran peace take small step forward
• Wheat futures weighed by profit-taking, as Wasde data reassessed
• Russian and Canadian crops may have scope for upgrades, some say
• However, market underpinned by dire US harvest outlook
Wheat prices eased, weighed by profit-taking on their strong gains of the last session, and as traders mulled less bullish aspects in the USDA’s May crop report.
Brent crude offered a negative backdrop to grains in easing by 1.3%, to $106.41/Bbl, heading for what would be its first losing session in four.
Comments by Donald Trump, ahead of travelling to Beijing, that he did not think he would need China’s help to end the Iran war were viewed as mildly comforting, albeit that a US peace deal with Tehran remains elusive.
However, in the wheat market, modest selling was encouraged too by some less bullish assessments of Tuesday’s USDA Wasde report, beyond the headline forecast of the lowest US wheat harvest since 1972 which propelled July-26 futures in Chicago soft red winter wheat and hard red winter wheat to limit-up closes in the last session.
Some analysts raised the potential for some recovery in US wheat output forecasts, as occurred in 2022, the last year to see a drought-shrunken harvest, and scope for upgrades to estimates for Canadian and Russian harvests too.
The USDA’s forecast of an 86.0Mt Russian harvest this year stands below estimates from other commentators as high as 90Mt, albeit that methodology – eg the inclusion, or not, of Crimea’s crop – may explain part of the gap.
The USDA in the Wasde also highlighted reduced import demand from many major buyers, including Algeria, Egypt and Morocco, thanks to improved domestic harvests.
Combined wheat output in Morocco, Algeria, and Tunisia will soar by 61% to a record 12.9Mt this year, thanks to a “bumper crop supported by ideal conditions".
“Weather during the crop year, for all three countries, has been remarkably favourable,” the USDA said.
Nonetheless, pressure was limited by the extent of the USDA’s pessimism over this year’s US harvest, with officials highlighting that “32% of US winter wheat acreage will not be harvested in 2026 - the second-highest abandonment since the Dust Bowl”.
Futures in Chicago soft red winter wheat, the world benchmark, pared losses of 0.2% in late morning deals, for July-26 delivery.
Hard red winter wheat for July-26 stood 0.3% lower. It is, being grown in the drought- and frost-hit Plains, the type poised to see the biggest setback this year, with the USDA forecasting output at the lowest since 1957.
For wheat as a whole, the US harvest is expected at the lowest since 1972.
Minneapolis spring wheat, also grown largely on the Plains, recovered to show 0.1% headway in late deals, for July-26.
In Europe, Paris milling wheat for September-26 shed 0.5%, with the USDA foreseeing an EU stocks overhang into 2026/27, fostering some growth in exports.
London feed wheat for November-26 fell 1.0%, but remained above £190/t at the close. The May-27 contract, however, in shedding 1.1% retreated below £200/t.
Sterling regained 0.1% against the euro, but fell 0.2% against a dollar buoyed by data showing a rise in US wholesale inflation to 6%, its highest since 2022, denting potential for interest rate cuts.
Among oilseeds, soybeans for July added 0.5%, buoyed by hopes that Mr Trump’s visit to China will unearth fresh demand for US exports.
However, with Chicago soyoil futures for July-26 slipping 0.6% on profit-taking encouraged by easing crude oil, rapeseed fell too in Paris, by 0.2% for August-26.
Corn futures for July-26 added 0.4%, helped by a market focus on a USDA forecast that world stocks will end 2026/27 at 21% of demand, the tightest in 14 years.
On a more neutral note, the USDA’s forecast for corn exporter stocks to end 2026/27 at 5.2% of world consumption is close to a 10-year average.
