Wheat Eases from Over 2-Year High

Wheat futures fell below $6.70 per bushel, extending losses from the more than two-year high of $7.06 reached on July 22, as a sharp decline in crude oil prices weighed on agricultural markets. The US and Iran paused military strikes over the weekend following two weeks of hostilities, raising hopes that renewed diplomatic efforts could ease tensions and allow shipping through the Strait of Hormuz to normalize. Despite the pullback, supply risks remain elevated. Heatwaves across Europe and continued attacks between Russia and Ukraine have intensified worries over crop production and exports. Russian strikes on grain infrastructure and ports prompted Allseeds to suspend operations in Ukraine's Odesa region. Still, discussions on mechanisms to protect Black Sea shipping, including coordinated vessel notifications and temporary ceasefire windows, have raised hopes that grain exports can continue with limited disruption.

Wheat decreased 5% to 661.47 USd/Bu

Wheat futures climbed more than 1% to above $7 per bushel in late July, reaching their highest level since July 2023, as worsening geopolitical tensions and adverse weather conditions fueled supply concerns. President Trump warned that the US would hold Iran accountable for any further Houthi attacks after Yemen's Houthis said they had targeted two Saudi oil tankers for allegedly breaching their maritime blockade. The attacks, the first since the Iran-backed group announced a naval blockade against Saudi Arabia, heightened fears of broader disruptions to global energy and shipping routes. Adding support to wheat prices, intense heat weakened crop prospects in France and Germany. Moreover, EU grain output is forecast to decline by more than 9% this year, marking the sharpest annual contraction in more than two decades. Elsewhere, extreme temperatures across North Dakota, a key US spring wheat-producing state, have increased stress on crops and raised concerns over yield losses.