Written Commentary
London Wheat Report
Yet another low-volume day for London wheat today, with both Nov-25, May-26 and Nov-26 trading, both ending the day in the green following a slight rally seen across both the European and US wheat contracts. The improvement in prices was enough to boost volume through the Matif front month, but London still lagged behind, trading sub-200 lots on Nov-25. A weakened euro (and GBP) bolstered the ever-so-slightly bullish mood across the Euro traded Ag contracts, appealing to foreign buyers.
There was news that the IKAR consultancy had cut its 2025 wheat crop expectation owing to reports of drought in southern Russia, which acted as a bullish catalyst, the first we have seen in a while. The agency trimmed its forecast by 500,000 tonnes (down to 84.0 mmt from 84.5 mmt previously) and adjusted its wheat export forecast to 42 mmt in the new marketing season (down from 42.5 million previously touted). Locally in Russia, the Rostov region, Russia’s top wheat-producing area in 2024, could potentially see the lowest wheat harvest since 2015 due to severe drought.
Perversely, once again adding fuel to the bearish fire, France’s farm ministry reaffirmed the commonly held view today that the country’s 2025 soft wheat production is forecast to be at 32.6 mmt. This figure is significantly up (+27%) when compared with last year’s rain-hit harvest and in line with market expectations. The forecast for 2025 production would be 2.4% above the average of the past five years, but this lower average was inclusive of two very unproductive years.
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