Wheat Market Weighs Supply Risks and Weak Demand

Wheat fell to around $7.2 per bushel, moving further below the 3-1/2-year high of $7.67 reached on August 28, as improving weather in parts of the US Plains eased concerns over winter wheat conditions. The USDA said recent rainfall across the northern and central Plains had improved topsoil moisture and prospects for germination, although planting remained behind average at 17% complete versus the five-year average of 21%. Kansas was 10% planted, Oklahoma 4% and Texas 21%. Meanwhile, continued attacks between Russia and Ukraine have clouded prospects for a recovery in Black Sea grain exports, with strikes on vessels and ports leaving seaborne shipments largely disrupted. Russia has increasingly redirected grain through Baltic and Arctic terminals, although volumes remain below normal Black Sea flows. Markets are also monitoring diplomatic efforts at the UN and the Trump-Xi meeting for potential developments affecting energy flows and Chinese agricultural purchases.

Wheat climbed nearly 2% toward $7.30 per bushel, rebounding from a three-week low hit on September 18, as the latest round of US-China trade engagement fueled optimism ahead of the Trump-Xi summit. Officials from both countries, led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng, met over the weekend. Bessent described the discussions as “very successful,” while Lifeng said they were held in a “good atmosphere.” President Donald Trump and Chinese President Xi Jinping are set to meet in the US on September 24, with investors closely watching for signs of additional Chinese purchases of US agricultural products. The Trump administration has said Beijing pledged to purchase at least $17 billion of US farm exports, on top of a separate commitment to purchase 25 million tons of US soybeans yearly. Any further purchase commitments could therefore focus on other agricultural commodities, including wheat.

Wheat fell towards $7.13 per bushel, the lowest level in three weeks, as renewed hopes for a Russia-Ukraine ceasefire raised expectations of reduced disruption to Black Sea grain shipments. US President Donald Trump announced a truce on strikes on Russia and Ukraine's energy facilities. Also, Turkey is seeking to broker a broader agreement between Kyiv and Moscow that could stop attacks on ships in the Black Sea. Ukraine has indicated it would support such a deal if Russia agrees, while the Kremlin has described the proposal positively. The prospect of improved trade flows has added pressure to wheat prices, which remain below the 3½-year high of $7.67 reached on August 28. Meanwhile, the latest USDA forecasts pointed to slightly above-average global wheat inventories. The agency also lowered its 2026/27 export forecasts for Russia by 3 million metric tons to 43 million tons and for Ukraine by 1 million tons to 12.5 million tons