Wheat Leaking Back Lower on Thursday

Wheat futures are trading lower, with Chicago SRW down 2-4 cents, Kansas City HRW down 1-2 cents, and Minneapolis spring wheat down 3-5 cents. Old crop export sales showed net reductions of 13,373 MT, while new crop sales exceeded estimates at 882,202 MT, marking a marketing year high driven by purchases from unknown destinations, the Philippines, and Japan. The International Grains Council kept its 2025/26 world wheat output steady but increased stock estimates by 2 MMT to 262 MMT due to a 1 MMT decrease in consumption.

Analysis

Wheat futures are exhibiting weakness at midday Thursday, with Chicago SRW, Kansas City HRW, and Minneapolis spring wheat contracts declining by 1 to 5 cents across various delivery months. This price softness is accompanied by old crop export sales data for the week ending May 15th, which registered net reductions of 13,373 metric tons (MT), falling within the anticipated range but indicating continued erosion in immediate demand. Conversely, new crop wheat sales for the 2025/26 marketing year presented a robust outlook, substantially exceeding estimates at 882,202 MT and marking a marketing year high for forward bookings, driven by significant purchases from unknown destinations, the Philippines, and Japan; combined old and new crop sales reached their highest level since December 2023. Further contextualizing the global market, the International Grains Council (IGC) maintained its 2025/26 world wheat production forecast steady at 806 million metric tons (MMT), but revised consumption downwards by 1 MMT, consequently increasing projected marketing year ending stocks by 2 MMT to 262 MMT. This slight increase in global stock estimates could temper upward price potential despite strong forward export commitments.

Key Decisions for Investors

• Investors should closely monitor the sustainability of strong new crop export sales, as these robust forward bookings represent a key bullish factor against the current backdrop of price declines and weak old crop demand.
• Consider the potential capping effect of the International Grains Council's increased global ending stock projection (now 262 MMT) on wheat prices, which may offset some optimism generated by strong new crop sales.
• Evaluate strategies that acknowledge the current divergence between bearish spot/old crop market conditions and bullish new crop demand signals, potentially including analysis of calendar spreads or a greater focus on new crop futures contracts.