Wheat Futures Ease After Rally as Supply Outlook Shifts

Key Moments

Early Friday Trade: Wheat Pulls Back

Wheat futures began Friday’s session slightly lower across all three major markets, giving back a portion of the strong gains recorded in the prior session.

On Thursday, the wheat complex staged a notable rally, with Kansas City hard red winter (HRW) contracts leading the advance. KC HRW futures climbed between 10 ½ and 29 ¼ cents, driven primarily by strength in the front-month contracts. The move higher attracted fresh participation, with open interest expanding by 4,270 contracts.

Chicago soft red winter (SRW) wheat futures also firmed, adding 10 to 13 1/4 cents in most contracts. In contrast to KC, open interest in Chicago declined by 10,382 contracts, largely concentrated in the front-month May contract, which shed 12,320 contracts. Minneapolis spring wheat futures ended Thursday between 6 and 10 ½ cents higher.

Export Sales Reflect Steady Old-Crop Demand

Weekly export sales data released Thursday morning showed old-crop wheat bookings of 129,022 metric tons for the week of April 16, an increase from the prior week. Japan was the top buyer with 59,400 MT, followed by Nigeria at 47,400 MT. New-crop sales were reported at 8,000 MT, with the bulk of that volume attributed to South Korea.

Weather and Drought Conditions for U.S. Winter Wheat

The 7-day weather outlook pointed to limited precipitation of up to an inch for western areas of Kansas, with little to no rainfall projected for the Texas and Oklahoma panhandles.

An updated Drought Monitor released in the morning indicated that 70% of the U.S. winter wheat crop is currently classified as being in drought. This marks the highest share since 2023 and the largest percentage for this stage of the growing season since 2022.

Global Crop and Demand Developments

In overseas markets, IKAR reduced its estimate for the Russian wheat crop to 90 million metric tons, lowering its prior forecast by 1 MMT.

In Europe, FranceAgriMer reported the French soft wheat crop at 83% rated Good/Excellent, a decline of 1 percentage point from the previous week.

Saudi Arabia issued a tender to purchase 710,000 MT of wheat, with the tender deadline set for Friday.

International Grains Council Adjusts World Balance Sheet

The International Grains Council trimmed its global wheat production estimate by 1 MMT and reduced projected use by 4 MMT. As a result, the group raised its outlook for world ending stocks by 8 MMT, to a total of 284 MMT.

Futures Performance Recap

Wheat futures settled higher on Thursday but were under slight pressure in early Friday dealings. The following table summarizes key front and deferred contracts, including Thursday’s closes, the day-over-day changes, and the early Friday indications reported as “currently” levels relative to Thursday’s settlement.

Disclosure

On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.