Wheat futures have a history of trading in volatile trading ranges, and the past two months were no exception.

What’s happened

In late April, September 2024 Chicago wheat futures were trading near the $5.75 price point in a rather lackluster price pattern. Within just over one month’s time, September wheat futures gained nearly $1.50 in value due to news that the Russian wheat crop might be decreasing in size. This friendly fundamental news then triggered short covering by the funds, which added to the price rally.

Then, as quickly as the market rallied, prices then sold off, trading back down to the April price point of $5.75, and even lower.

From a marketing perspective

Wheat futures may now again be at a bargain value for global end users. World supplies remain historically tight with global ending stocks, according to the June 2024 WASDE report, coming in at 253.61 million metric tons for the 2024/25 crop year. This is down from 259.56 MMT in the 2023/24 crop year, and down from 271.040 million metric MMT in the 2022/23 crop year.

Current global production numbers still stir controversy. Here in the United States, pre-report estimates for Friday’s Planted Acreage report have all wheat planted acres at 47.657 million acres with 34.197 million of those winter wheat and 11.34 million spring wheat. This “all wheat” planted acreage number is down from nearly 50 million acres one year ago.  

World weather continues to be threatening for the wheat crops in the Black Sea Region, as they are forecast to receive hot and dry weather in the coming months. The Russian wheat crop is now pegged at 83 MMT, according to the most recent USDA report, down from 91.5 million metric tons in the 2023/24 crop year.

Also smaller, is the Ukraine wheat crop, coming in at 19.5 million metric tons on the most recent USDA report, down from 23 million metric tons one year ago.

With uncertainty regarding global supply of wheat, some global end users have already stepped up to secure wheat. The country of Norway this week announced that they would start stockpiling grain, specifically wheat, for the remainder of 2024 and 2025. They seem to be bucking the idea of “hand-to-mouth purchasing” and instead want food security for their people.

Prepare yourself

Wheat futures often offer volatile price action year-‘round, and the weeks and months ahead may continue to support that notion. While past performance is not indicative of future results, be aware of a seasonal tendency for a price rally in wheat.  This seasonal potential price move suggests a recovery rally may be possible starting in early July for the September Chicago wheat futures.

All eyes will be on global wheat for wheat production around the world in the coming months. Supplies are still tight, and overall demand remains strong.

Reach Naomi Blohm at 800-334-9779, on X (previously Twitter): @naomiblohm, and at [email protected].

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