FX.co ★ Wheat Rebounds on Renewed Supply Risks

Wheat futures have surpassed $5.35 per bushel, inching closer to levels not seen since January 29th, as they approach an eight-week high. This upward movement is driven by concerns over supply and strong demand indicators. Severe cold spells across the US Plains and sections of southern Russia have reignited fears of winterkill for crops already under stress, exacerbating supply worries given that recent dry conditions hindered the formation of protective snow cover in key areas. Additionally, weather-induced disruptions and persistent logistical challenges in the Black Sea region continue to hamper export activities, while uncertainty surrounding Russia’s forthcoming export quota adds to anticipations of a tighter global supply as the marketing year progresses. On the demand frontier, US export sales have held steady, as purchasers diversify away from Black Sea sources due to rising delivery risks, thereby bolstering spot prices. Despite the fact that global inventories remain high, this resurgence signifies a reevaluation of the potential risks to production and the continuity of exportable supplies.