Euronext wheat futures plunge to lowest since August 2020

Euronext milling wheat futures plunged to new lows during intra-day trading on Friday, as traders and investors raised bearish bets on the outlook for wheat near the contract’s expiry.

March Euronext futures were trading as low as €184.50/mt, down €6.25/mt from the open, putting the price of wheat futures at their lowest point since August 2020.

Wheat prices are more than 50% below the over-€400/mt prices seen after Russia's invasion of Ukraine had created uncertainty over global wheat supplies.

Before August 2020, wheat futures had failed to maintain a price level above €200/mt and generally tended to trade between €150/mt and €190/mt.

Traders said the continued pressure from rising Russian exports and increasingly aggressive Russian prices are driving down global wheat prices.

Russian offers for 11.5% and 12.5% protein wheat cargoes were assessed at $201/mt and $206/mt respectively, on an FOB basis from Russian Black Sea ports.

Surplus stocks elsewhere have also weighed on wheat prices, with millions of tonnes of wheat still yet to be sold in northern Europe and the Black Sea.

A Romanian trader said stocks of old crop milling and feed wheat in Romania and Bulgaria were just below 4 million mt, with traders already making trades on the new crop due in July.

In Poland, one trader sees around 2.5-2.8 million mt of wheat available, from forecasts of 5.5 million mt of wheat exports for the 2023-2024 marketing year.

Even as supplies rise, demand remains virtually nonexistent at the European Black Sea ports for new sales of milling wheat, with a similar trading environment for sellers in northern Europe.

Lower prices have frustrated farmers, who are reluctant to sell in some cases below their production costs as prices plunge, leading to originators being unable to secure wheat supplies one trader said.