Wheat Market Weighs Supply Risks and Weak Demand

Wheat prices hovered around $6.40 per bushel, falling more than 10% from their two-year peak of $7.08 on July 22. The decline was attributed to weaker Russian prices, lackluster international demand, and the emergence of alternative export routes that eased concerns over potential disruptions in the Black Sea. Additionally, positive developments in negotiations to restore shipping through the Strait of Hormuz bolstered market sentiment.

Pakistan reported that the United States and Iran were "close to some sort of arrangement" to reduce tensions, which provided a glimmer of hope.

However, risks to grain exports persist as Ukraine and Russia continue to target each other's shipping routes. Ukraine has revised its 2026/27 grain export forecast downward by up to 12% from its earlier projection. Meanwhile, Russia's wheat export outlook has also been downwardly adjusted. Consulting firm IKAR has lowered its forecast for Russian wheat exports to 44.5 million tonnes, and Sovecon expects August shipments to hit their lowest level in a decade.

Traders are now eagerly awaiting the US government's latest crop forecasts, which are scheduled for release on Wednesday.