Winter Wheat Slipping as Spring Wheat Pop Continues

Wheat futures are showing mixed performance with winter wheat contracts weakening while spring wheat is gaining, following a generally stronger trading day on Thursday led by spring wheat. Export sales data is pending release, with expectations of net reductions for 2024/25 and new crop sales estimates ranging from 300,000 to 800,000 MT; meanwhile, SovEcon increased its Russian wheat export forecast for 2025/26, while ASAP Agri lowered its Ukraine export estimate.

Analysis

The wheat market is exhibiting divergent performance early Friday, with winter wheat contracts (Chicago SRW and Kansas City HRW) softening after gains on Thursday, while Minneapolis spring wheat futures continue to demonstrate strength. On Thursday, Chicago SRW futures rose by 3 to 4 cents, Kansas City HRW gained 6 to 7 cents, and Minneapolis spring wheat led with increases of 12 to 14 cents. Current Friday indications show July CBOT wheat down 1 cent after closing at $5.34, July KCBT wheat down 3/4 cent from $5.31 3/4, and July MGEX wheat up 3 1/2 cents from $6.15 1/2. Preliminary open interest figures from Thursday were mixed, declining 1,456 contracts for Chicago SRW but increasing 1,355 contracts for Kansas City HRW, suggesting varied market participation. The market anticipates the release of delayed Export Sales data, with trader expectations for 2024/25 ranging from net reductions of 200,000 metric tons (MT) to net sales of 100,000 MT, and new crop sales projected between 300,000 MT and 800,000 MT. International supply forecasts are also mixed: SovEcon has increased its Russian 2025/26 wheat export estimate by 1.1 MMT to 40.8 MMT, whereas ASAP Agri projects Ukraine's 2025/26 exports at 15 MMT, a decrease from 16.2 MMT in 2024/25. Concurrently, the French soft wheat crop condition has slightly deteriorated, with 70% rated good/excellent, down from 71% the previous week.

Key Decisions for Investors

• Investors should monitor the distinct price action between winter wheat contracts, which are currently weaker, and spring wheat contracts, which are showing gains, as this divergence may indicate varying supply/demand fundamentals or present spread trading opportunities.
• The forthcoming U.S. Export Sales data release is a critical near-term catalyst; significant deviations from the expected range (net reductions of 200k MT to sales of 100k MT for 2024/25, and new crop sales of 300k-800k MT) could induce price volatility.
• Evaluate the evolving Black Sea export outlook, where increased Russian export projections (SovEcon +1.1 MMT for 2025/26) could partially offset reduced Ukrainian forecasts (ASAP Agri -1.2 MMT for 2025/26) and a minor decline in French crop conditions, influencing global supply perceptions.
• Given the mixed sentiment and Friday's early price adjustments after Thursday's gains, consider positions that account for potential short-term corrections in winter wheat while acknowledging the relative strength in spring wheat.