FX.co ★ Wheat Nears 5-Year Low

Wheat futures recently declined to $4.90 per bushel, marking their lowest value since late June 2020. This drop was attributed to plentiful U.S. and global supplies, muted export demand, and favorable weather conditions, which overshadowed the positive impact of a temporary trade truce between the U.S. and China. According to the latest USDA report, global wheat production and consumption are expected to increase by 1% in the 2025/26 season. The report estimates ending stocks at 265.7 million tonnes, a slight increase of 0.2% from the previous season of 2024/25, and above the average trade expectation of 261.2 million tonnes. Furthermore, enhanced weather conditions across the U.S. Plains have been beneficial for winter wheat crops, while predicted rainfall in Ukraine and Russia has alleviated concerns of crop stress, contributing to further price pressure. On the international trade scene, markets responded positively to advancements in U.S.-China relations, with the U.S. planning to reduce tariffs on Chinese goods from 145% to 30%, and China planning to decrease tariffs on U.S. imports from 125% to 10%.