Wheat Bears Pushing Back on Friday

Wheat futures are broadly lower on Friday, with CBT, Kansas City HRW, and MPLS contracts declining 5-7 cents, paring Thursday's gains. This movement occurs as total wheat export commitments are reported at 9.571 MMT, slightly below the prior year but still 41% of USDA's projected total, outpacing the 39% average sale pace. Concurrently, Sovecon slightly reduced its Russian wheat crop estimate to 83.3 MMT, while France's soft wheat harvest reached 89%.

Analysis

The wheat market is exhibiting bearish short-term momentum, with futures across CBT, Kansas City, and Minneapolis exchanges falling by 5 to 7 cents, effectively erasing gains from the previous session. This price decline is occurring amidst a mixed fundamental backdrop. On one hand, total U.S. wheat export commitments of 9.571 MMT are tracking slightly below the volume from the same period in 2020/21. Furthermore, the French soft wheat harvest is reported to be 89% complete, signaling that a significant portion of this crop is secured and nearing the market, which typically exerts downward pressure on prices. On the other hand, the pace of U.S. export sales is a point of underlying strength, representing 41% of the USDA's annual projection, which is ahead of the 39% five-year average. Additionally, a minor bullish signal comes from Sovecon's slight downward revision of the Russian wheat crop estimate to 83.3 MMT, indicating potential tightening in global supply, though the adjustment is marginal. Currently, the market appears to be weighing the immediate pressure from harvest progress and weak price action more heavily than the supportive, forward-looking export pace.

Key Decisions for Investors

• Given the current price retreat and bearish pressure from the advanced French harvest, traders with long positions may consider protecting recent gains or tightening stop-loss orders.
• Investors should closely monitor upcoming U.S. Export Sales reports to confirm if the strong sales pace continues, as this remains a key bullish counter-signal to the prevailing negative sentiment.
• Pay close attention to further revisions in global crop estimates, particularly from the Black Sea region, as the minor Sovecon adjustment highlights the market's sensitivity to international supply-side news.