FX.co ★ Wheat Pulls Back from 8-Month Highs

Wheat futures retreated to below $5.70 per bushel after hitting an eight‑month high on February 20th, as the market recalibrated in the face of mounting physical supply and shifting macroeconomic headwinds. The earlier risk premium, driven by frost threats in the Black Sea region and drought conditions in the US Plains, is fading as updated weather models now point to favorable precipitation across the hard red winter wheat belt, easing prior concerns about potential crop losses. At the same time, the global supply outlook is tilting toward abundance, supported by India’s decision to authorize 2.5 million tons of wheat exports, Argentina’s record 28‑million‑ton harvest, and upgraded Russian production estimates approaching 91 million metric tons. This wave of additional supply is confronting a market increasingly unsettled by the US administration’s proposed 15% global tariff, which risks sparking retaliatory trade measures. As a result, even with weekly export inspections running 19% above last year’s pace, wheat futures were unable to sustain their recent multi‑month highs.