Wheat Market Shows Mixed Action: Winter Wheat Advances, Spring Wheat Retreats

Global wheat markets presented a mixed picture on Thursday morning. While winter wheat varieties recorded modest gains, spring wheat contracts saw a slight retreat. This movement followed a robust rally on Wednesday, spearheaded by Kansas City (KC) wheat, which propelled the grain complex to fresh highs. Chicago Soft Red Winter (SRW) wheat futures contracts also reached their highest levels since 2024 on Wednesday.

The general upward trend in wheat prices is driven by escalating geopolitical tensions in the Black Sea region and global supply concerns. The intensification of the Russia-Ukraine conflict and attacks on port infrastructure have increased uncertainty surrounding grain shipments. Additionally, renewed tensions between the United States (U.S.) and Iran near the Strait of Hormuz have added a risk premium to markets. The U.S. Department of Agriculture (USDA) projects the smallest U.S. winter wheat crop since 1965 for the 2026/27 marketing year, with a significant decline expected in Hard Red Winter (HRW) wheat production.

During Wednesday's rally, Kansas City HRW wheat futures surged by 29 to 31 cents, while Chicago SRW contracts rose by 25 to 27 cents. Minneapolis (MPLS) spring wheat also recorded gains of 20 to 22 cents at midday. However, on Thursday, a slight overall decline of 0.70% was observed in general wheat futures, accounting for the pullback in spring wheat. U.S. spring wheat conditions deteriorated, with the good-to-excellent rating dropping five percentage points from the previous week. This particularly increased pressure on spring wheat.

Globally, extreme weather conditions are adversely affecting wheat yields. Heatwaves in Europe (especially in France) and drought in the U.S. Plains have lowered production expectations. Australia also reduced its 2026 wheat harvest outlook by 30%. The USDA anticipates global wheat demand to outpace production by 0.8% in 2026/27, signaling a supply deficit in the market. These factors continue to support demand, particularly for winter wheat varieties.

Market analysts expect continued volatility in wheat prices. Beyond the Black Sea conflict, global weather patterns and harvest forecasts from major producers will be closely monitored. High input costs, such as fuel and fertilizers, also continue to impact grain flows in the Black Sea region, pushing global prices higher. In the coming period, new USDA reports and geopolitical developments will play a critical role in determining market direction. Tighter supply conditions for winter wheat, leading to its pricing higher than spring wheat, may incentivize millers to adjust their blending ratios.