Wheat market falls on profit taking and better weather

Profit-taking and forecasts of improved weather conditions are pushing concerns about drought in the US into the background. As a result, wheat prices are coming under considerable pressure this week.In particular, prices for the 2025 harvest are falling sharply, although the new crop is also being dragged lower. Large volumes of wheat in Europe remain unsold, which is continuing to weigh on the market.On the Matif futures market in Paris, old crop wheat fell below €185 per tonne around midday on Wednesday 6 May. Trading volumes are limited, but the move illustrates how sentiment in this market has weakened. Only a week ago, the market for this wheat had risen to €197 per tonne. The new crop is also taking a significant hit today. On Matif, price declines of €3 to €4 are being quoted for later contracts compared with Tuesday. September 2026 therefore dropped to €208 per tonne, €6 lower than a week ago. In Chicago, old crop wheat has also declined by around €10 per tonne over the past week. A similar fall is visible there for the new crop, despite the fact that severe drought conditions persist in the southern wheat-growing regions.Damage particularly severe in OklahomaThe situation is most critical in Oklahoma. Based on current crop conditions, production there is expected to be only around half of normal levels. In addition, crops are developing rapidly, reducing the likelihood of recovery.Weather models forecasting rainfall in parts of Europe and the US have played an important role in the recent decline in prices. With less focus on drought stress, investors and speculators are taking profits accumulated over the past month. Another factor is the reduced likelihood of an escalation in the conflict between the US and Iran. This is pushing oil prices lower, which in turn is affecting grain markets. The impact is more pronounced for maize and soybeans, but it is also influencing sentiment in the wheat market.