Wheat rebounds from 4-1/2-month low on Black Sea supply concerns

Wheat prices surged on Friday following a 4-1/2-month low earlier in the trading week, as disruptions to Black Sea exports continued to pose a threat. Despite a stronger US dollar and expectations of abundant harvests in Australia and Argentina, wheat, corn, and soybean futures all rose, setting the stage for weekly gains. The Chicago Board of Trade's most-traded wheat contract climbed 1.1% to $5.90-1/2 a bushel, following a drop to $5.82, its lowest point since June 30.

Corn and soybean futures also posted gains, with corn up 0.9% to $4.46-1/2 a bushel, and soybeans rising 0.9% to $12.29-1/2 a bushel. The CBOT wheat was on track for a weekly decline of 0.1%, extending a 25% slide from September highs. The US dollar remained near a 1-1/2-year high against other currencies, potentially dampening US export demand by increasing the cost of dollar-denominated crops overseas.

Meanwhile, Argentina's Rosario Grains Exchange boosted its 2026/27 wheat production forecast by 500,000 metric tons, citing improved weather conditions. Similarly, Australia is ramping up a harvest expected to yield around 32 million tons, significantly more than initially anticipated. However, Russia and Ukraine's wheat supply remains constrained due to ongoing attacks on shipping in the Black Sea, a situation that peace talks have thus far failed to resolve.

Analysts warn that the prolonged closure of Black Sea grain exports could lead to supply shortages, potentially driving prices even lower. Rod Baker, an analyst at Bendigo Bank, noted that if wheat resumes flowing through the Black Sea, there could be further downward pressure on prices; conversely, if it doesn't, prices may have already reached a new floor.