Wheat Weakness Continues on Thursday Morning

Wheat futures experienced continued downward pressure across all major exchanges on Wednesday, extending losses into Thursday morning, with CBT soft red wheat, KC HRW, and MPLS spring wheat seeing declines of 1 to 8 cents. This downturn is largely driven by an upward revision of Russia's wheat forecast by Sovecon to 87.2 MMT, signaling increased global supply. The market is also anticipating weekly Export Sales data and the USDA's WASDE report, though the latter is expected to show minimal changes to the 2025/26 balance sheet, suggesting the current trend reflects broader concerns regarding global supply dynamics.

Analysis

Wheat futures are exhibiting sustained bearish pressure across all major exchanges, evidenced by session losses including 5-6 cents for CBT soft red wheat and 7-8 cents for MPLS spring wheat. The primary driver of this negative sentiment is an enhancement in the global supply outlook, specifically Sovecon's upward revision of Russia's wheat forecast by 1.1 MMT to 87.2 MMT. Market participants are now awaiting two key data points: the weekly Export Sales report, with expectations for 300,000 to 650,000 MT, and the USDA's monthly WASDE report. However, the WASDE report is not anticipated to be a significant market catalyst, as traders foresee minimal changes to the 2025/26 balance sheet, with U.S. stocks only projected to decline by a marginal 4 million bushels to 865 mbu. The current price action, with Sep 25 CBOT Wheat closing at $4.95, indicates the market is weighing the increased Russian supply more heavily than the potential for minor adjustments in U.S. fundamentals.

Key Decisions for Investors

• Given the downward price momentum fueled by increased Russian supply forecasts, investors should exercise caution on new or existing long positions as the near-term technical and fundamental picture appears bearish.
• Closely monitor the upcoming weekly Export Sales data, as a result toward the upper end of the 300k-650k MT expectation range could offer temporary price support, while a miss would likely amplify negative sentiment.
• Since the upcoming WASDE report is widely expected to be a non-event, any surprising reduction in global or domestic stocks could create a short-term bullish opportunity, but the prevailing trend remains downward until a new catalyst emerges.