Wheat futures stabilise after Russian export restrictions spark rally
Wheat contracts opened with mixed action on Monday, holding near unchanged levels following a significant rally driven by reports of restricted Russian exports through the Don-Azov channel.
Wheat futures opened with mixed trading on Monday, hovering within a couple of cents of unchanged levels. This consolidation follows a strong rally on Friday, where contracts gained double-digit cents across major US exchanges. The recent price appreciation was catalysed by reports that Russia has restricted wheat export flows through the Don-Azov channel, a critical route accounting for nearly a quarter of the nation's total wheat shipments.
On Friday, the wheat complex closed with significant strength. Chicago SRW contracts finished between 15 ¼ and 20 ¾ cents higher, with nearby September contracts up 40 ½ cents for the week. Open interest in Chicago contracts decreased by just 574 contracts. Meanwhile, Kansas City HRW futures rose between 17 ¾ and 22 cents, with September rallying 37 ¾ cents, while open interest increased by 1,813 contracts. Minneapolis spring wheat also posted gains of 11 ½ to 14 ¼ cents, with September up 33 ¾ cents from the previous week.
Market fundamentals remain supportive, underpinned by updated data from the US Department of Agriculture. The latest Crop Production report indicated that all wheat production decreased by just 7 million bushels to 1.536 billion bushels. Winter wheat production came in below estimates at 990 million bushels, a 40 million bushel drop from the previous month, while spring wheat production was reported at 475 million bushels, exceeding expectations.
The USDA’s World Agricultural Supply and Demand Estimates (WASDE) further highlighted tightening supplies, showing US carryout down 22 million bushels to 722 million bushels. Globally, stocks were reduced by 2.78 million metric tonnes to 272.84 million metric tonnes. This decline was driven by reductions in the US, Argentina, Canada, and the EU, reinforcing the bullish backdrop for the commodity.
Sentiment among institutional traders also shifted, with the weekly Commitment of Traders data revealing a reduction in bearish bets. Managed money traders in Chicago wheat futures and options backed off their net short positions by 6,705 contracts for the week ending July 7, bringing the total net short to 62,325 contracts. Conversely, in Kansas City wheat, these traders added 4,845 contracts to their net long positions, raising the total to 11,764 contracts.
As trading resumed on Monday, specific contract prices reflected the previous day's momentum. September 2026 CBOT Wheat closed at $6.40 ¼, up 20 ½ cents, while December 2026 closed at $6.54 ½, also up 20 ½ cents. In Kansas City, September 2026 wheat closed at $6.76 ¼, up 22 cents, and December 2026 at $6.90 ¼, up 22 cents. Minneapolis contracts saw September 2026 close at $6.53 ½, up 13 ½ cents, and December 2026 at $6.74 ¼, up 14 cents.
