Early this month, London and Paris wheat futures fell to fresh contract lows, extending a run of falling prices that began two months before.

Poor EU wheat demand - highlighted by poor weekly wheat export sales - had encouraged managed money funds to build near record short positions in the Paris wheat futures which weighed on the market's weakness.

However, since then there's been a changing dynamic for the world's leading wheat exporters, Russia and Ukraine, as well as 2025 production concerns. This has triggered a wave of short covering, helping Paris wheat futures gain €14/t at their best this week.

The United States Department of Agriculture (USDA) published its December World Agricultural Supply and Demand Estimates (WASDE) report earlier this week, but with minimal changes for the world's wheat balance sheet.

Compared to last month, the USDA found an additional one-million-tonne carry in from last season and see small production cuts for Canada which is down 40,000 tonnes in line with Statistics Canada (StatsCan). The EU is also down 1.3 million tonnes and Brazil is down 400,000 tonnes. 

London wheat closed at £189.30/t last Wednesday before sliding £5.75/t to a low of £183.55/t on Monday. This is the lowest the May contract has traded since early May '24.

Paris wheat followed a similar pattern closing at €226.50/t on 27^th November, trading to a low of €224.5/t on Monday before closing at €228.75/t on Tuesday.

Chicago's May '25 wheat futures contract was the most bearish, trading to its lowest point since the contract started in back in July 2022 and reaching a low of $5.506/bushel on Wednesday.

Last Wednesday saw London May wheat futures close at £192.95/t. Prices firmed slightly to £194.40/t before easing back to £193.34/t on Friday's close. Markets opened £3.05/t down on Monday at £190.40/t and haven't moved much since. 

MATIF followed a similar pattern with its May '25 contract closing at €235.00/t on Friday, before trading €6.25/t down at one point on Monday to €228.75/t.

Escalating tensions between Russia and the West have left speculative traders nervous given their near record short position in French wheat futures. The uncertainty over potential interruption to Black Sea grain flows triggered a wave of short covering to reduce risk which helped rally wheat prices by almost £8/t from last week's multi-month lows.

Adding to the upside price potential is the likely cuts to the Russian grain export quota for the February to June 2025 period. Some see the number falling to just ten million tonnes, although the official announcement won't be made until January. Stricter Russian wheat export controls might be expected given the fast pace of shipping this season to date, coupled with the lowest winter wheat planted area this autumn since 2018-19 and what's in the ground being less than perfect.

The US political landscape and beneficial weather have combined to push wheat markets lower in recent days. UK prices suffered from sterling strength, leaving London wheat futures nearing their contract lows.

President Trump says he will be able to bring a prompt end to the Russian/Ukraine war, which, if achievable, would remove the risk to Black Sea wheat supplies which continue to provide the world's major importers with the cheapest available wheat. 

The markets have moved down since the beginning of November. The London International Financial Futures and Options Exchange (LIFFE) May '25 contract reached a high of £195/t on 1^st November before slowly drifting off to a low of £191.50/t. The Marché à Terme International de France (MATIF) December '24 contract followed a similar track, opening November with a high of £221.50/t before drifting off to a low of €212.25/t.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.

The beginning of the week saw wheat futures markets extend their losses, with London wheat futures losing almost 8% of their value since the peak on 3rd October. Improving wheat crop prospects for Argentina this season, as well as for the EU and UK in 2025, encouraged the selling.

The Rosario Grains Exchange raised its Argentina wheat production estimate to 19.5 million tonnes following recent rains. It also raised the wheat export estimate to 13.3 million tonnes, which if achieved would be the second highest ever. Crop ratings for Argentinian wheat increased from 31% to 38%, 'good/excellent'.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.

Having seen a spell of speculative fund short covering propel wheat futures prices to multi-week highs earlier this month, markets have subsequently eased lower again.

Questions remain over Russian wheat exports and the country's 2025 wheat production potential. However, in the near positions there is a more than adequate supply and with good cover, buyers are back on the side lines. Russian weekly wheat shipments remain at about one million tonnes per week, but this week the country missed out in one international tender.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope.

The United States Department of Agriculture (USDA) published its October World Agricultural Supply and Demand Estimates (WASDE) report last Friday but presented no bullish surprises which contributed to a softer spell for world wheat prices.

Minor cuts in production for Brazil, the EU, India and Russia, partly offset by increases for Ukraine, sees world production down 2.8 million tonnes on the previous estimate to a total of 794.08 million tonnes. However, this is still almost four million tonnes up on last year.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell. 

Geopolitical issues triggered spells of speculative short covering in futures markets this week. Trader concerns over the wider repercussions of a potential retaliation by Israel against Iran increased crude oil prices by over 3% on Monday to over $80/t, its highest since 19^th July. This had a positive impact on other commodity markets, including wheat.

Away from the tensions in the Middle East, Russian missile strikes on two Ukrainian Black Sea ports, including Odessa, resulted in damage to grain carrying vessels - another reminder of the potential risk around shipping from the world's cheapest wheat source. 

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.

Towards the end of last month, speculative traders extended their short positions in Paris wheat futures. They expected weaker prices due to the poor EU wheat export pace and Russia and Ukraine dominating world wheat trade.

Latterly, adverse EU weather raised concerns for winter planting which triggered some short covering and a lift in futures prices. However, news broke on Tuesday that Iran had launched a ballistic missile attack on Israel accelerated the short covering, leading to a sharp jump in all wheat futures markets. 

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by farm trader, Lucinda Redgate.

Further speculative fund short covering helped wheat prices move higher earlier this week. London wheat futures recovered £3 from last week's low, although further gains to match other wheat futures markets were capped by another spell of sterling strength. The pound reached its highest level against the euro and the US dollar since April 2022, with investors attracted by the Bank of England leaving the UK base rate unchanged as the Federal Reserve cut US interest rates by 0.5%.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope. 

The end of last week saw the United States Department of Agriculture (USDA) publish its September World Agricultural Supply and Demand Estimates (WASDE) report. Any expectations for a bullish report to boost prices were dashed.

World production was cut 1.5 million tonnes to 796.88 million tonnes and there was also a 900,000-tonne rise in consumption which presented a potential marked cut in year-end stocks. However, increases for carry-in Canadian stock to this season to align with StatsCan leaves year-end stocks up 600,000 tonnes on last month to a total of 257.22 million tonnes. Despite this being eight million tonnes down on last year, the market subsequently found ready sellers.

There was little to help the markets from the world corn balance sheet. Several analysts expected a cut for the US corn yield estimate, but it was increased by one million tonnes. 

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell. 

Wheat futures prices have stabilised over the past week, sitting approximately 7% above their August lows. There is an increasing number of supporting elements to hold prices up, but nothing sufficient enough to move them on to another level yet.

Strong Russian and Ukraine exports dominate world trade and spot Russian wheat offers remain anchored at about $218/t FOB, failing to follow outside markets higher. The lack of rain and low soil moisture for drilling crop '25 is an additional watch for an extensive area covering Eastern Ukraine, Russia and Kazakhstan. Russian winter drilling is reported to be at its slowest pace since 2013 because of the dryness. According to the Ukraine Ministry of Agrarian Policy and Food, just 2% of Ukraine winter wheat area is planted due to record high temperatures and dryness.  

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope. 

Wheat markets have enjoyed a buoyant start to September. Just three days into the new month Paris futures topped a 9% price gain from their contract lows seen trading during the last week of August. With the US and EU harvests nearing completion and harvest farm selling pressure drying up, trade liquidity has become an issue at the lower price levels. Speculative short covering has provided buying interest, although the primary negative wheat price driver remains in play.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell. 

This season's leisurely pace of EU wheat exports is contributing to market negativity. To the week ending 25^th August, exports are ahead by 238,000 tonnes to a total of 3.927 million tonnes which compares with 5.038 million tonnes last season.

There is a lower surplus of around 27 million tonnes which is four million tonnes below last year. According to analysts Stratégie Grains, this figure will leave a carryover stock almost four million tonnes lower than the carry in. Therefore, it would be premature to be overly concerned for the slower export pace at this stage.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by agronomist, Alex Pope.

Poor EU wheat export demand, particularly for French wheat, sent Paris wheat futures to their lowest levels since the middle of March.

EU wheat shipments were up just 337,000 tonnes on the week to 3.553 million tonnes which compares to 4.527 million tonnes in the same period last year. Romania is the top EU shipper so far with close to 1.5 million tonnes, almost three times the French pace. Egypt has received the most wheat with imports of 505,000 tonnes, followed by Nigeria and Morocco. 

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell. 

On Monday this week the United States Department of Agriculture (USDA) published its August World Agricultural Supply Demands Estimate (WASDE). Traders expected to see a slight increase in US wheat production, but despite seeing a higher yield, the USDA also saw a smaller harvested area. This left US wheat production dropping from the previous estimate of 54.66 million tonnes to 53.93 million tonnes.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by farm trader, Lucinda Redgate. 

Improving production prospects for US wheat and corn has encouraged speculative funds to build near record short positions in Chicago Board of Trade (CBOT) futures, sending markets to contract lows at the end of July. The subsequent weakness in the US dollar – which has enabled US grains to be more competitive in export markets - has allowed for a modest wheat price recovery, but strong crop ratings temper any notable buying enthusiasm.

You can also listen to the Frontrunner podcast - press play to hear the latest report. The report this week is read by marketing assistant, Becca Russell.