US wheat futures rallied to multi-month highs earlier this week. Prices were driven higher by weather fears, due to a spell of cold weather forecast to hit much of the US winter wheat belt, including overnight lows of -10 °C as far south as Texas and below -20 °C in Kansas. Snow cover has been inconsistent, so given the severity of the cold some winter kill seems most likely. As a result, managed money traders took in some of their short positions, reducing their risk should yield potential have been compromised.

Earlier this week, the United States Department of Agriculture (USDA) published its February updates to the World Agriculture Supply and Demand Estimates (WASDE) report, but wheat traders looking for a bullish boost were left disappointed.

Ahead of the report, Paris wheat futures rallied to their highest since 18^th October, but those gains were all lost once the report data was digested.

Comments made by President Trump that Canada and Mexico would be hit with 25% tariffs on exports into the US, and China with tariffs of 10%, signalled a challenging week for commodities. Early trade for wheat futures was unsurprisingly lower, with traders concerned the tariffs would slow trade and therefore the sales pace for US commodities.

A lack of positive price drivers, slow domestic consumer demand and a renewed spell of sterling strength took London wheat futures lower this week, trading to within £1.50 of the contract low set on 2^nd December.

Despite a host of global weather-related crop issues that may impact 2025 production potential, there isn't yet anything severe enough to trigger speculative short covering. Funds in the Chicago Board of Trade (CBOT) wheat sit just below 100,000 contracts short. They are concerned the US could end the season with a heavy carry out wheat stock despite decent weekly US wheat export inspections taking the cumulative shipped tonnage to 13.764 million tonnes 25% ahead of last year.

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The newly elected US President Trump seemed to positively impact wheat prices, despite fears that tariffs on imported goods would harm US export potential.

Chicago Board of Trade (CBOT) wheat futures gathered pace on Tuesday, gaining almost 4% by the close and posting its biggest single daily gain since 20^th May last year. The price rally was perhaps less Trump driven, though lack of immediate tariffs for China was a positive sign for US agricultural markets. Speculative fund short covering was driven by fears of exposed US winter wheat crops suffering from winter kill, with extreme cold extending across the Plains as far as Kansas. 

Late afternoon last Friday, the United States Department of Agriculture (USDA) published a wealth of data for world and US grains, leaving the potential for price volatility to follow.

The January World Agricultural Supply and Demand Estimates (WASDE) report was accompanied by US 1^st December stocks and the USDA's first look at the US winter wheat planted area.

Wheat futures rallied through the Christmas holiday, driven higher by speculative short covering. The weakening Euro in foreign exchange markets, coupled with concerns for future Russian export volumes and their new crop production potential, drove the Paris market to its highest since 18th October last year. Subsequently, a lack of fresh export business and poor EU wheat export sales have galvanised selling interest and prices have eased.

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. 

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.

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. 

During this year's harvest, the industry noted increasing reports of ergot appearing in cereal crops across the country. There are a few theories as to why it's increased over the last few years and why it's so prevalent this season, but it's important to bear in mind the picture can look quite different on a regional basis and there are many factors at play.

As we head into a new season, it's important to consider the potential impact of ergot, subsequent actions when it's found and any management considerations required in the field.

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.