Wheat Losses Extend to Thursday’s Close

Wheat futures experienced broad declines on Thursday, pressured by weaker-than-expected USDA export sales, which significantly missed analyst estimates and marked a sharp year-over-year drop. This downward momentum was amplified by upward revisions in global production forecasts from key regions like Russia and the EU, alongside the International Grains Council's increased world production and ending stock estimates for 2025/26, collectively signaling an ample supply outlook amidst softening demand.

Analysis

Wheat futures experienced a broad-based decline, with Chicago SRW contracts falling by 7 to 8 cents, driven by a confluence of bearish fundamental signals. The primary catalyst was a deeply disappointing USDA Export Sales report, which showed net sales of only 255,208 MT, falling significantly short of the 300,000 to 600,000 MT analyst consensus range. This figure represents a 40.26% decrease from the prior week and a substantial 61.75% drop compared to the same week last year, indicating a severe weakening in foreign demand for U.S. wheat. Compounding this demand-side weakness, global supply forecasts were revised upwards. Russia's IKAR agricultural consultancy increased its crop estimate by 0.7 MMT, while the European Commission raised its 2025/26 production forecast by 1.6 MMT. On a global scale, the International Grains Council amplified the bearish sentiment by increasing its world production forecast by 2 MMT and, critically, raising its 2025/26 ending stocks estimate by 2 MMT to 264 MMT. A minor tender from a South Korean mill for 50,000 MT of U.S. wheat was insufficient to offset the overwhelmingly negative market sentiment.

Key Decisions for Investors

• Given the confluence of weak U.S. export demand and rising global production forecasts, maintaining a bearish outlook on wheat futures is warranted as fundamentals point to continued price pressure.
• Monitor upcoming USDA Export Sales reports with high scrutiny, as the recent 61.75% year-over-year decline establishes a critical demand deficit that must reverse to provide any meaningful price support.
• Investors should anticipate that any further upward revisions to production or ending stock estimates from key regions like Russia, the EU, or global bodies like the IGC will likely cap potential price rallies and reinforce the current downward trajectory.