Wheat Easing Back Early on Thursday

Wheat futures closed higher across exchanges on Wednesday but are showing slight weakness in early Thursday trade, ahead of Friday's USDA WASDE report which is expected to indicate increased US wheat stocks to 867 mbu and world ending stocks to 266.13 MMT. Global supply estimates are mixed, with French and EU production forecasts slightly up, while SovEcon projects a decline in Russia's 2026 crop to 83.8 MMT due to reduced acreage, and a South Korean importer secured 75,000 MT.

Analysis

Wheat futures experienced modest gains across major exchanges on Wednesday but are trading with slight weakness in early Thursday sessions. This price action coincides with a significant reduction in preliminary open interest, notably down 15,115 contracts in December CBT, indicating potential short-term position unwinding and technical adjustments.

A key near-term catalyst is Friday's USDA WASDE report, which Reuters surveys project will show increased US wheat stocks at 867 mbu and world ending stocks at 266.13 MMT. These anticipated increases of 23 mbu and 1.93 MMT respectively from September figures suggest a bearish supply outlook, contributing to the current mildly negative sentiment.

Global production estimates present a mixed picture; French and EU forecasts indicate marginal increases, while SovEcon predicts a substantial reduction in Russia's 2026 crop to 83.8 MMT due to acreage cuts. This long-term Russian supply contraction offers a bullish counterpoint to immediate bearish WASDE expectations, alongside a positive demand signal from a 75,000 MT purchase by a South Korean importer.

The prevailing market sentiment is mildly negative, primarily influenced by the expected increase in global wheat inventories detailed in the upcoming WASDE report. Investors are balancing this near-term supply pressure against longer-term supply concerns from Russia and intermittent demand signals.

Key Decisions for Investors

• Monitor the USDA WASDE report closely on Friday for confirmation of increased US and world ending stocks, which could exert short-term bearish pressure on wheat prices.
• Assess current wheat positions, balancing the near-term supply-side bearishness from WASDE expectations against the longer-term bullish implications of projected Russian acreage reductions.
• Watch for sustained demand signals, such as further international tenders, to gauge potential support for prices amidst fluctuating global supply dynamics.