Wheat Trading Lower on Tuesday Morning

Wheat futures weakened across Chicago SRW, KC HRW and Minneapolis spring wheat, with CBOT March down roughly 8.5 cents to $5.20 3/4 and open interest rising about 13,890 contracts, signaling fresh selling pressure. USDA export inspections showed 488,025 MT shipped in the week of Dec. 11 (up 23.2% w/w and 61.4% y/y), lifting the marketing-year total to 14.124 MMT, 21.9% above last year, while USDA weekly export sales were a five-week low at 361,715 MT for the week ending Nov. 20. Managed funds increased net shorts—adding ~5,055 contracts in CBT to 53,746 and ~2,125 in KC to 22,064—and France’s 2026 soft-wheat area is estimated higher at 4.56M ha, reinforcing a bearish near-term tone amid mixed demand signals.

Analysis

Wheat futures opened lower across the complex with Chicago SRW down 8–9 cents across most contracts and CBOT March 2026 settling at $5.20 3/4 (down 8.5 cents) while open interest rose by roughly 13,890 contracts, indicating fresh selling pressure. KC HRW and Minneapolis spring wheat were similarly weaker (KC March closed $5.12, down 6 cents; MGEX March $5.69 3/4, down 7 cents), and front-month May contracts showed comparable intraday weakness.

USDA export inspections for the week of Dec. 11 totaled 488,025 MT, a 23.2% weekly increase and 61.4% above last year, lifting the marketing-year shipments to 14.124 MMT (21.9% above a year ago); largest recipients were the Philippines (113,367 MT), Mexico (89,044 MT) and South Korea (66,008 MT). By contrast, the USDA weekly export sales report for the week ending Nov. 20 showed just 361,715 MT, a five-week low and slightly below last year, which signals mixed demand momentum despite stronger recent shipments.

Positioning and supply cues add to the bearish tone: managed funds expanded net shorts in CBT wheat by ~5,055 contracts to 53,746 and increased KC net shorts by ~2,125 to 22,064, while France’s 2026 soft-wheat area is estimated up 0.1 million ha to 4.56 million ha. The combination of rising speculative shorts, larger acreage estimates and uneven bookings supports a moderately negative near-term outlook, with key near-term risks being changes in weekly export sales, further fund flows, or weather-driven production shifts.

Key Decisions for Investors

• Reduce directional long exposure to wheat futures or related instruments and consider trimming positions given fresh selling, rising open interest and expanding speculative net shorts
• Use short-duration hedges—e.g., put protection or collars—rather than aggressive outright short positions while monitoring weekly USDA export sales and inspections for confirmation of weakening demand
• Watch CFTC managed fund positioning and European acreage/production updates (France 2026 soft-wheat area higher) as triggers to re-evaluate exposure; increase defensive hedging if net shorts continue to grow