Wheat Market Outlook – April 14, 2025

Global Grain Trade Declines

Source: USDA

According to the USDA, the global trade of grains is expected to decline by 7 per cent in the 2024/25 marketing year. While smaller trade is being experienced in corn, rice, and other feed grain markets, the largest decline is in the wheat trade which the USDA forecasts will fall by 9 per cent from the previous year.
For wheat, strong production in some key importing regions (eg. China and Pakistan) reduced import demand, while government regulations (eg. Turkey) also impacted import volumes.
On the supply side, smaller wheat production was experienced in Russia, the EU and Ukraine.
Despite the decline in trade, global wheat prices have remained relatively steady as global wheat stocks are expected to tighten by 3 per cent from last year.

Cash Wheat

Source: Mercantile

Global cash wheat prices were mixed last week. In North America, spring wheat prices were about $4.00/mt stronger on a Fob basis, while winter wheat prices were lower. Australian prices were stronger on the week upon downward revisions for its upcoming crop. Prices in the EU were pressured as the Euro appreciated against the U.S. dollar.

Global Wheat Production and Trade

There is a lot of competition in the wheat markets as wheat is produced around the world. Below is a brief synopsis on last week’s market events in the major wheat origins.

FUTURES

May ‘25 contract Chicago winter wheat closed at $554-4, up 17-6 cents on Friday, up 26-6 cents on the week.
May ‘25 contract Kansas winter wheat closed at $568-0, up 10-0 cent on Friday, up 10-4 cents on the week.
May ‘25 Minneapolis hard red spring wheat closed at $615-0, up 13-0 cents on Friday, up 30-4 cents on the week.
U.S. wheat futures are lower 7-12 cents lower at the time of writing as the forecast added rain in parts of the U.S. Southern Plains.

Canadian Wheat

Non-durum Canadian wheat exports in week 35 were 428.1k mt. The season total of 14.3 million mt is about the same as last year’s volume. Meanwhile AAFC is calling for a 2 per cent decline in exports. The load (19.8k mt) of canola we reported on last week was shipped from Thunder Bay, but the port has not shipped any wheat yet.

Source: Mercantile, based on CGC data

Canadian Durum

Algeria tendered for 50k mt but reportedly bought upwards of 400k mt. Canada is expected to be the main origin with a price of $353-$357/mt, but one cargo is expected to be from Australia, and another is likely from Turkey (or Russia/Kazakhstan) at $345/mt. The shipments are for May 1-15, May 16-31, June 1-15, and June 16-30. If the price is correct, we calculate it to be worth about $10.00/bu at the elevator in Saskatchewan. Interestingly, the price calculates to about the same value if it is shipped from Vancouver or Thunder Bay.

Source: Mercantile

Canadian durum exports in week 35 were 95.2k mt. The season total is now 3.7 million mt, up 59 per cent from last year. A third of the durum weekly exports were shipped from the St. Lawrence.

Source: Mercantile, based on CGC data

Durum bids were a bit stronger last week at $9.25-10.00/bu. Canada is well situated to fulfill Algeria’s purchase. If the volume was just 50k mt, it will not move the market much, if the volume is closer to 400k mt, we could see durum prices appreciate to about $9.50-$10.00 depending on your location.

U.S. Wheat

The USDA report was negative for wheat, but poor crop conditions and the falling U.S. dollar supported wheat futures.
U.S. wheat ending stock were raised 27 million bushels, to 846 million bushels. This is now 22 per cent above last year, and more than the 823 million bushels the trade was expecting. The increase in stocks were the result of 10 million bushels more of Hard Red Spring (HRS), white wheat, and durum imports. Use was 17 million bushels lower, led by a 15-million-bushel decline in exports. U.S. exports are now expected to be 820 million bushels up 16 per cent from last year.
Source: Mercantile, based on USDA data

Half of the USDA’s increase in U.S. wheat imports was in the spring wheat class. The USDA increased U.S. HRS imports by 5 million bushels to 80 million bushels, up 13 per cent from last year. U.S. HRS exports were reduced by 10 million bushels, and use was 1 million bushels lower. Ending stocks grew by 16 million bushels to 223 million bushels, up 17 per cent from last year. Essentially all of U.S. wheat imports are from Canada.
We mentioned last week that the USDA needed to do some work on its durum balance sheet. And they did, sort of. The USDA realized its ending stock number was too high, so it increased feed use from 0 to 15 million bushels. Usually, no durum is used in feed. The average grade of the U.S. durum crop is a No.1 Hard Amber Durum, but it was noted that the distribution of grades was wide. It is possible some durum is being used as feed, but not likely a lot, and definitely not 19 per cent of last year’s estimated U.S. production. It is more likely that the USDA’s 36 per cent increase in production is overstated. U.S. imports were raised 2 million bushels to 52 million bushels, up 16 per cent from last year. The USDA’s ending stocks estimate fell 13 million bushels to 32 million bushels. This still reflects a 52 per cent increase from last year compared to the March 1 stocks which were just 6 per cent more than last year.

Source: Mercantile, based on USDA data

Weekly U.S. wheat export sales were at the low end of expectations at 107k mt. The season total of 786 million bushels is 13 per cent above last year (unchanged from last week) compared to the USDA’s new forecast for a 16 per cent increase in exports. US Soft Red Winter (SRW) remains the cheapest on a Fob basis, and the falling U.S. dollar should aid the competitiveness of U.S. wheat on the global market.

Two-Year U.S. Dollar Index

Source: Barchart

The condition of the U.S. winter wheat crop is 48 per cent Gd/Ex compared to 56 per cent this time last year. Crops are suffering in South Dakota, Nebraska, and Texas. There was some rain in Nebraska and Texas, but more will be needed. The area of winter wheat under drought conditions fell from 37 per cent to 32 per cent as of April 8th. Rain was added in this morning’s forecasts for parts of Kansas and the Texas panhandle.

Source: USDA

U.S. Hard Red Spring (HRS) for May 25 is valued at $271.00mt FOB Pacific Northwest (up $4.00/mt from last week) FOB Gulf Hard Red Winter (HRW) 12/13.5 pro is valued at $255.00/mt (down $4.00/mt from last week); Gulf HRW 11/12.5 pro is at $247.00/mt (down $4.00/mt from last week).

Australian Wheat

The USDA reduced Australian exports by 500k mt to 25.5 million mt. The decrease was added to stocks. The USDA raised Canadian exports by the same amount.
The Grain Industry Association of Western Australia (GIWA) is forecasting a 9 per cent decline in the wheat area in Western Australia this year. Western Australia was a large contributor to the large size of Australia’s crop last year.
FOB values in Australia: May ’25 Australian Premium White Wheat (APW), WA was valued at $257.00/mt (up $8.00/mt from last week).

Argentine Wheat

The USDA left its forecast for Argentina’s exports at 11.5 million mt. So far, exporters hold just 7 million mt worth of licences.
FOB Argentine 12 pro wheat upriver for May ’25 is $00/mt (unchanged from last week).

EU Wheat

EU exports were trimmed 500k mt by the USDA to 26.5 million mt. Ending stocks were lifted 700k mt to 11.3 million mt. Both EU exports and ending stocks are forecasted to be about 30 per cent lower than last year. The rising value of the Euro against the U.S. dollar will increasingly deter additional sales of EU wheat.
EU Fob prices: May ‘25 French 11 pro wheat closed at $247.00/mt (down $2.00/mt from last week); May ‘25 German 12.5 pro wheat closed at $256.00 (down $4.00/mt from last week); May ‘25 Baltic 12.5 pro wheat closed at $259.00/mt (up $3.00/mt from last week).

Black Sea Wheat

The USDA lowered Russian exports by another 1 million mt to 44 million mt. This remains about 1-2 million mt too high. The decrease in exports was added to ending stocks which were raised to 11.3 million mt. This is 3 per cent less than last year, but Russian ending stocks will continue to be revised higher as the USDA decreases its export number.
Turkey has resumed importing Russian wheat. Wheat imports by Turkey have surged to 2.5 million mt since the country relaxed its ban on imports. The USDA reduced its estimate for Turkish wheat imports by 500k mt to 3.5 million mt.
We have Russian Fob values for 12.5 per cent protein wheat for May ’25 at $249.00/mt (up $4.00/mt from last week).

Significant Purchases/Trades

- Korea bought 65k mt of August arrival feed wheat at $263.49.
- Jordan bough 60k mt of August shipment milling wheat at $264.49.
- Algeria tendered for 50k mt of durum but are thought to have bought upwards of 400k mt. Canada is expected to be the main origin at an estimated price of $353-$357.

Significant Events Over the Past Week

For the global wheat balance sheet, the USDA put ending stocks 0.6 million mt higher than last month at 261 million mt. This is 3 per cent lower than last year, and slightly higher than what the trade was expecting. The increase in stocks was the result of 1.4 million mt less use surpassing a 0.8 million mt decline in supply. The increase in ending stocks was in exporting nations, while stocks in importing countries were lower. Chinese stocks were reduced by 2 million mt to 127.1 million mt, down 6 per cent from last year.

Source: Mercantile, based on USDA data

The weekly CFTC Commitment of Traders report showed managed money reducing their net short in wheat futures by 9,908 contracts to 102,132 contracts as of April 8. In Kansas City wheat, they increased their net short by 4,159 contracts to 49,834 contracts.
Recent reports indicate the U.S. is reevaluating a proposal to increase levies on Chinese made and operated ships at U.S. ports. The administration says it will take a closer look at the impacts the levies might have on agricultural commodities.
On Apr. 9, 2025, U.S. “reciprocal tariffs” were delayed for 90 days. Instead, a 10 per cent tariff is applied to the imports of most countries (excluding Canada and Mexico which have their own tariff regimes applied). The trade war between the U.S. and China ramped up with China tariffing U.S. goods at 125 per cent and the U.S. tariffing Chinese goods at 145 per cent.

Weekly Market Outlook

According to Mercantile, weakness of the U.S. dollar should help support U.S. sales, but demand continues to be slow. The attention of the trade will continue to turn towards new crop conditions and weather in the Northern Hemisphere. Mercantile is hearing of some strong targets being rewarded. If 75 per cent sold old crop, Mercantile would hold additional wheat sales for the present.