Harvest and weather make wheat vulnerable to price pressure

The wheat market remains firmly in the grip of a predominantly bearish sentiment. Downward price drivers continue to outweigh the factors that could provide support to the market. The start of the wheat harvest across the Northern Hemisphere, improved weather conditions and ample global supplies are all weighing on prices. On Euronext, the September wheat contract fell to €204 per tonne on Tuesday, its lowest level in around two months, while CBOT wheat retreated towards $6.03 per bushel. This places the July contract in the United States at the equivalent of approximately €190 per tonne. Prices Have Fallen SharplySeptember wheat in Chicago declined to $6.16¼ per bushel, equivalent to €194 per tonne. This leaves prices more than €20 per tonne below the levels seen in mid-May. Even the December contract is now only just managing to hold above the €200 per tonne mark. In Europe, futures prices remain above this threshold for the time being. However, at €204 to €222 per tonne for the 2026 harvest on the Paris futures market, values are still around €12 per tonne lower than they were just a few weeks ago. The principal reason for the downward pressure is the weather. Following a period of concern over heat and drought, large parts of Europe have received much-needed rainfall. Growing prospects have improved in France, Germany, Poland, Scandinavia and the Baltic States, reducing fears of significant yield losses. Additional Wheat Supplies Enter the MarketIn the United States, additional supplies are also becoming available as the winter wheat harvest gathers pace. This is increasing pressure on the market, although losses are being somewhat limited by the poor condition of the crop. Only 26% of the winter wheat crop is currently rated good to excellent, while spring wheat stands at 47% in that category. At the same time, international competition remains intense. Wheat from Romania and Bulgaria is being offered at around $229 to $233 per tonne FOB, while French, Russian and Ukrainian origins are priced only slightly higher. Despite this, the European Union continues to perform well on export markets. With exports reaching 21.47 million tonnes, the pace of shipments is approximately 6% ahead of last season. This suggests that European wheat has become more competitive again due to lower prices. Lower Crop Outlook in AustraliaNot all developments are negative for price prospects, however. Analysts at ABARES expect Australia’s wheat crop to reach 26.7 million tonnes, around 9 million tonnes lower than last season. Drought conditions, a reduction in planted area and elevated fertiliser costs are all weighing on production prospects. For the current market, this remains of secondary importance, as traders are focused primarily on harvest developments in Europe and North America. Later in the season, however, a smaller Australian export programme could become a more significant factor. Other Grains Also Under PressureSupport is also lacking in other grain markets. Maize remains under pressure due to favourable weather conditions in both the United States and Europe, the near completion of US planting and additional supplies coming from South America. Soybeans are likewise struggling to gain momentum. Favourable growing conditions in the United States, technical selling and the absence of substantial Chinese purchases are keeping the market on the defensive. On Tuesday, CBOT maize fell to $4.40¼ per bushel, equivalent to €149 per tonne. Soybeans declined to $11.65¼ per bushel, or approximately €368 per tonne.