Wheat Holding onto Gains at Midday

Wheat futures are trading higher, led by gains in hard red winter markets, following a court ruling against President Trump's tariffs and anticipation of Friday's export sales data. Traders expect net reductions of 200,000 MT to sales of 100,000 MT for 2024/25, with new crop estimates ranging from 300,000 to 800,000 MT. SovEcon raised its Russian wheat export forecast for 2025/26 to 40.8 MMT, while ASAP Agri projects Ukraine's exports at 15 MMT, down from 16.2 MMT in 2024/25.

Analysis

The wheat complex is exhibiting broad-based gains, with hard red winter (HRW) and spring wheat markets leading the advance; Kansas City HRW contracts are 4 to 6 cents higher, and Minneapolis spring wheat futures have risen by 7 to 8 cents, exemplified by Jul 25 MGEX Wheat reaching $6.10 1/4 (up 7 cents). This price strength occurs alongside a significant legal development wherein a Federal trade court declared President Trump's 'liberation day tariffs' illegal, mandating a halt within 10 days, though the White House is appealing this ruling, introducing an element of policy uncertainty. Market participants are also anticipating Friday's deferred Export Sales report, with expectations for 2024/25 net sales ranging from a reduction of 200,000 MT to new sales of 100,000 MT, and new crop sales projected between 300,000 and 800,000 MT. From a global supply perspective, SovEcon has revised its Russian wheat export forecast for 2025/26 upwards by 1.1 MMT to 40.8 MMT, potentially increasing global availability, while private firm ASAP Agri projects a decrease in Ukraine's 2025/26 exports to 15 MMT from 16.2 MMT in 2024/25, which could tighten supply from that region.

Key Decisions for Investors

• Investors should note the current upward momentum in wheat prices, particularly in HRW and spring wheat, which may be supported by the court's tariff ruling if upheld, but remain cautious pending the outcome of the White House appeal.
• Traders should anticipate potential market volatility surrounding the upcoming Export Sales data, as the wide range of expectations for both old and new crop sales implies a significant price reaction is possible depending on the actual figures.
• Consider the contrasting Black Sea export outlooks – increased Russian supply versus potentially reduced Ukrainian shipments – as these divergent forecasts will play a crucial role in shaping global wheat balance sheets and price trends in the medium term.