Is a turnaround in the wheat market imminent?

Fundamentally not much has changed, but the sentiment in the US wheat market seems to have turned 180 degrees. Instead of looking for a new bottom, attention is directed upwards again. In Europe, traders are clearly more cautious. News from South America has also been more positive for the grain market for a change. The March contract for wheat on the Matif closed yesterday €1.75 higher at €192.25 per tonne. On the CBoT, there was more action in wheat. The March contract in Chicago closed 15¼ cents higher at $5.52½ per bushel. Corn was also in the green, rising 3¾ cents to $4.31¼ per bushel. Soybeans closed 13¼ cents higher at $11.37¼ per bushel. The sentiment on a market is and remains difficult to interpret. Fundamentally, not much has changed in the wheat market over the last two days, and yet wheat prices on the futures market in Chicago rose to their highest point in three months. Analysts suggest that part of this is due to strong exports from the US. According to the latest figures from the USDA, a total of 501,900 tonnes of wheat crossed the border in the week ending February 5. This is at the upper end of what traders were counting on. The wintry cold in southern Russia is also cited as a reason for the changed sentiment in the wheat market. Assessing the damage to wheat from the frost is still difficult at this moment. However, according to various sources, it seems almost certain that not all wheat has come through the frost and especially the ice formation on the fields (due to little or no snow). This does not entirely explain what is happening in the wheat market. The wheat market has been so pessimistic for so long that such a turn was inevitable, said Jack Scoville, an analyst at The Price Futures Group, to Reuters. In the US, the sentiment in the wheat market is somewhat more positive, but in Europe, there is less enthusiasm. Partly, European exporters are at a disadvantage due to a relatively strong euro. Competition from exporters in the Black Sea region also does not help much. However, exports there are not exactly running smoothly either. Reports from Ukraine earlier this week indicated that orders cannot be fulfilled because terminals are inactive due to Russian attacks on the Ukrainian power grid. Russia's wheat export by sea was nearly 13% lower in January compared to January 2025. The Brazilian government agency Conab released a new harvest forecast for Brazil yesterday. Conab lowered the expected wheat harvest by 1 million tonnes to 6.9 million tonnes. Corn was reduced by 500,000 tonnes to 138 million tonnes. The largest crop in Brazil is soybeans, for which the harvest estimate was increased by nearly 2 million tonnes to 178 million tonnes. However, this still puts Conab below the USDA prediction, which estimates a Brazilian soybean harvest of 180 million tonnes. China and the US are working towards a ceasefire in the trade war, reports the South China Morning Post. Under the current trade agreement, the US imposes a 10% import duty on all fentanyl-related products. In retaliation, there is a 10% duty on soybeans from the US. In the lead-up to Trump's visit to Xi in Beijing, scheduled for April, both countries are said to be working on a new trade deal. According to analysts, with a 10% duty on soybeans, it is unlikely that China will import an additional 8 million tonnes of soybeans from the US this season and 25 million tonnes next season according to various experts.