Story
CBOT Wheat Reaches Six-Week High on Expectations of Tighter USDA Supply Forecast
Chicago Board of Trade (CBOT) wheat futures climbed to a six-week high on Friday as traders adjusted positions ahead of a key U.S. government report expected to show tightening domestic supplies. The gains reflect market anticipation of a more bullish supply and demand outlook.
Pre-Report Positioning Drives Gains
The primary driver for the rally was the upcoming U.S. Department of Agriculture (USDA) monthly crop data, scheduled for release at 12 p.m. EDT. According to a poll of analysts, the market expects the USDA to reduce its estimate for 2026-27 U.S. wheat ending stocks to 714 million bushels, a significant decrease from the 744 million bushels forecast in June.
This expectation of a smaller surplus has prompted buying activity. Specific contract movements included:
- CBOT September soft red winter wheat was up 13-1/4 cents at $6.33 per bushel.
- K.C. September hard red winter wheat rose 15-3/4 cents to $6.70 per bushel.
- Minneapolis September spring wheat gained 9-1/2 cents to $6.48-1/2 per bushel.
AdGlobal Supply Concerns Add Support
Adding to the bullish sentiment were concerns over international supplies. Grain trade association Coceral reduced its forecast for soft wheat production in the European Union and Britain by 2%, citing adverse heat conditions. A smaller European harvest would tighten the global supply balance.
Furthermore, traders continue to monitor geopolitical tensions related to the Russia-Ukraine war. Any potential escalation could disrupt grain exports from the critical Black Sea region, as both nations are major global suppliers, adding a risk premium to the market.