Chicago Board of Trade (CBOT) wheat futures posted their biggest weekly gain since the start of the Russia-Ukraine war, rising for a seventh straight trading day on Friday. The most-active July contract climbed to $6.33-1/4 per bushel, the highest price since January 11.
The rally was driven by concerns over the impact of dry weather in parts of southern Russia and the central United States, as well as freezing temperatures in parts of Europe. These weather issues have raised fears about potential crop losses, sparking short-covering by traders.
The European Commission also cut its forecast for the European Union’s main wheat crop in the 2024/25 season to a new four-year low, citing a drop in planted area due to rain-disrupted planting.
While soybean futures edged lower and corn prices remained relatively flat, analysts noted that the USDA’s latest crop progress report, which showed winter wheat in good to excellent condition at 50%, down from 55% the previous week, further fueled the rally in wheat prices.
However, some analysts expect the price surge to ease going into next week, with one director of commodity sales at Futures International saying, “I think they kind of overdid it” and anticipating wheat to “bump up slightly or flatten on Monday.”
The strong performance of CBOT wheat this week underscores the ongoing concerns over global wheat supplies, which have been significantly impacted by the conflict in Ukraine, a major exporter of the grain.