European wheat loses export edge as trade slows and funds exit the market

European Union wheat exports remain relatively strong, but recent market signals indicate a loss of momentum. According to European Commission data, EU wheat exports reached 19.23 million tonnes as of May 31, while physical trade has begun to slow noticeably.

Morocco remained the largest buyer of EU wheat this season with 3.15 million tonnes, followed by Egypt (1.76 million tonnes), Saudi Arabia (1.74 million tonnes), Nigeria (1.62 million tonnes), and Algeria (1.11 million tonnes). Together, these countries account for more than one-third of total EU wheat exports.

Analysts are paying particular attention to the French port of Rouen, one of Europe’s key grain export hubs. While grain shipments totaled 218,600 tonnes in the week ending May 27, export volumes plunged by 66.6% to just 72,900 tonnes in the week ending June 3. At the port of La Pallice, activity was limited to a single 30,000-tonne cargo of soft wheat destined for Côte d’Ivoire.

Additional pressure is coming from investor behavior. Throughout May, speculative funds increased their long positions in Euronext wheat futures, betting on higher prices. However, market sentiment shifted sharply toward the end of the month.

During the week ending May 29, fund long positions declined by more than 25,000 contracts, or 9%, while net long exposure fell by nearly half. The move suggests that investors have become less confident about further price gains, reducing speculative support for the market.

Despite these developments, analysts do not view the situation as a crisis. The EU’s overall export performance remains competitive, and funds have not yet moved into net short positions. However, physical demand has not been strong enough to offset the withdrawal of speculative capital.

Market direction in the coming weeks will largely depend on the quality of the new harvest. Key importers of European wheat require consistent milling-quality supplies, meaning any harvest quality issues could intensify price pressure. For now, the market appears biased toward further weakness, although analysts believe the potential for a significant price decline is becoming increasingly limited.

Tags: EU, prices, wheat