Wheat Losing Streak Continuing On Thursday

Wheat futures are declining across all major exchanges, driven by weaker-than-expected USDA export sales of 255,208 MT for the week of June 19, which significantly missed analyst estimates and were down sharply year-over-year. This bearish sentiment is reinforced by upward revisions to global supply, including IKAR raising Russia's crop estimate to 84.53 MMT and the International Grains Council increasing world production by 2 MMT to 808 MMT and 2025/26 ending stocks by 2 MMT to 264 MMT, collectively signaling an easing supply outlook despite minor demand from South Korea.

Analysis

Wheat futures are facing downward pressure across all three major US exchanges, with prices for Chicago SRW, KC HRW, and MPLS spring wheat declining by 5 to 8 cents. The primary catalyst for this bearish sentiment is a significantly weaker-than-expected USDA Export Sales report, which documented sales of only 255,208 metric tons (MT), falling short of the analyst consensus range of 300,000 to 600,000 MT. This figure represents a sharp 40.26% decrease from the prior week and a 61.75% drop compared to the same week last year, signaling a substantial slowdown in foreign demand. Compounding the demand-side weakness are indications of an easing global supply picture. Russia's wheat crop estimate was revised upward by 0.7 MMT to 84.53 MMT by IKAR, while the International Grains Council raised its global production forecast by 2 MMT to 808 MMT. This larger production outlook outpaced the 1 MMT increase in consumption, resulting in a 2 MMT upward revision to 2025/26 ending stocks, now projected at 264 MMT. A minor tender from a South Korean mill for 50,000 MT of US wheat was insufficient to counter the broader negative data. Market participants are now looking ahead to the USDA's quarterly Grain Stocks report on Monday for the next major data point, with analysts forecasting 836 million bushels on hand as of June 1.

Key Decisions for Investors

• Given the combination of weak export data and upwardly revised global supply forecasts, investors should adopt a cautious to bearish stance on wheat futures in the short term.
• The upcoming USDA Grain Stocks report is a key catalyst; a number significantly above the 836 million bushel consensus would reinforce the current bearish narrative and could trigger further price declines.
• Traders should monitor for any new, significant demand catalysts, as the current environment of easing supply from Russia and higher global ending stocks suggests prices may remain suppressed without a substantial shift in consumption.