Global wheat futures plunge on weather, end-month selling

31 May 2022 | Sharon Levrez, Mark Shenk

Global wheat markets fell sharply Tuesday on the back of end of the month selling, the start of harvests in the US and better weather conditions, market sources said.

As of 1315 Eastern Time Chicago SRW futures were down 5-6% on the previous settlement, with July trading at $10.88/bu and September at $10.98/bu.

Chicago HRW futures were also down around 5% on last Friday’s settle, with July at $11.706/bu and September at $11.772/bu.

“End of month selling [is] adding to the bearish undertone. Great Plains and Northern spring wheat area are seeing an improvement in weather,” senior grain and oilseed commodity analyst at Futures International Terry Reilly told Agricensus.

In Europe, the front month September Euronext milling wheat futures contract fell back below the €400/mt mark, settling at €392.25/mt, down €15.50/mt on the day.

December settled at €385.75/mt, down €15/mt, and March 2023 at €381.40/mt, down €14.25/mt.

“The wheat market fell because harvest has started in earnest in the southern plains, forecasts have clearing weather for the spring wheat planting areas, and France got beneficial rains over the weekend,” added Charlie Sernatinger of ED&F Man.

“There is also some end of the month positioning pushing us down, and spreaders are front-running next week’s index roll of long positions from the July to the September,” he continued.

Some market watchers also pointed to the possibility that Russia might allow exports of grain from Ukraine, as reported over the weekend.

However, others thought the headlines were optimistic, but were creating additional selling, nonetheless.