Grain market review: Wheat
By Chris Lyddon
In much of the latter part of 2025, wheat prices managed to maintain strength in apparent contradiction with the supply and demand picture. But as the year drew to a close, levels were more mixed.
US Wheat Associates (USW), in its Weekly Price Report of Dec. 12, reported that “a weaker dollar and strong commercial sales provided some support, but large global supplies continue to be the overwhelming bearish price driver.”
Regarding exports, the US wheat sector’s export market development organization said that “capacity and logistics continue to play a crucial role, especially as increased activity in January and February tightens elevations.”
“Weather events also affected rail operations and contributed to higher secondary rail freight,” USW said. “Upcoming payments to farmers and ongoing soybean exports to China will continue to impact marketing strategies at the farmgate.”
USW experts noted that the USDA’s December World Agricultural Supply and Demand Estimates confirmed a bearish outlook, with wheat production increased by 9 million tonnes to a record 837.8 million.
“This record output, driven by major gains in key exporters like Canada, Argentina and the EU, significantly outpaces global use,” USW said, noting that ending stocks were expected to rise to 274.9 million tonnes.
In its Dec. 9 Grain: World Markets and Trade report, the USDA’s Foreign Agricultural Service (FAS) said global prices “were largely down since November, except for marginal increases to Canada, the United States and the EU.”
“Argentine quotes dropped $7 per tonne on an expected record crop and remain the lowest quotes globally,” the FAS said. “Russian quotes fell $5 per tonne with global supply pressures. Australian prices lost $1 per tonne on an anticipated bumper harvest. Quotes for the United States and Canada both ticked up $2 per tonne with strong exports starting off the trade year.”
The FAS described prices in the European Union as “relatively unchanged, gaining $1 per tonne.”
In its final Food Price Index report of the year, published on Dec. 5, the United Nations Food and Agriculture Organization said that “despite a generally comfortable supply outlook and reports of good harvests in Argentina and Australia, global wheat prices rose by 2.5% in November, albeit from lower levels last seen in the first half of 2020.
“Wheat markets were bolstered by potential Chinese interest in supplies from the United States, concerns over continuing hostilities in the Black Sea region, and expectations of reduced plantings in the Russian Federation,” the Rome, Italy-based organization said.
The International Grains Council (IGC) issued its final Grain Market Report for the year on Nov. 20, reporting that wheat, after hitting a five-year low in mid-October, rebounded, and had touched a four-month high.
“Despite broadly ample global supplies, wheat drew support from firmer soybean prices and renewed concerns over escalating Black Sea tensions,” the IGC said. “Recent strength was centered on North America. US prices were lifted by advancing soybean values, while rumors of Chinese buying of US wheat sparked speculative short covering.”
However, the IGC said fob values recently eased as no major Chinese wheat purchases emerged, while firmer prices were seen deterring buyers.
Canadian spring wheat quotations strengthened markedly, supported by US gains and persistently brisk pace of shipments, the IGC said, while EU prices (France) were little-changed month on month.
“Gains in US futures, limited grower selling and solid intra-EU demand offered support, but competition from Argentina and Black Sea origins continued to cap the upside,” the IGC said.Russian prices were “pressured at times by softer domestic cash markets,” while “a slightly firmer tone prevailed in Ukrainian wheat markets, with mounting challenges amid damage to rail and energy infrastructure adding to logistical costs.”
This article has been republished from The World grain.