Wheat Bulls Get Footing on Thursday, with Double Digit Gains

Wheat futures across all three exchanges (CBT, KC HRW, MPLS) closed higher on Thursday, with contracts gaining 8 to 12 cents, supported by a broader commodity rally, including crude oil. Despite the absence of the USDA Export Sales report due to a government shutdown, traders anticipate 350,000-650,000 MT of wheat sales. The International Grains Council (IGC) further influenced sentiment by projecting an 8 MMT increase in 2025/26 world wheat production to 827 MMT, alongside higher trade, consumption, and a 5 MMT rise in total stocks to 275 MMT.

Analysis

Wheat futures across all three major exchanges (CBT, KC HRW, MPLS) posted gains of 8 to 12 cents on Thursday, indicating a bullish sentiment in the short term. This upward movement was supported by a broader rally in the commodities complex, notably crude oil, suggesting macro-level influences.

Despite the absence of the USDA Export Sales report due to a government shutdown, market participants anticipate robust weekly wheat sales of 350,000 to 650,000 metric tons. The International Grains Council (IGC) further bolstered sentiment by projecting an 8 MMT increase in 2025/26 world wheat production to 827 MMT, alongside higher trade and consumption.

The IGC also revised global wheat stocks upwards by 5 MMT to 275 MMT, although old crop stocks are noted to be down 3 MMT. This suggests a nuanced supply picture where future production is expected to be ample, potentially offsetting current inventory drawdowns, contributing to the moderately positive market tone.

Key Decisions for Investors

• Investors should monitor the balance between anticipated robust demand, as suggested by expected sales, and the IGC's projections for increased future production and stocks, which could influence long-term price trends.
• The absence of the USDA Export Sales report creates a temporary data void; therefore, investors should closely watch for its eventual release and any subsequent revisions to export estimates, as this could introduce short-term volatility.
• Consider the broader commodity rally, particularly in crude oil, as a potential indicator for continued momentum in agricultural commodities, while remaining vigilant for shifts in macro-economic sentiment that could impact this correlation.