Wheat futures rose 2.2-3.9% on Friday amid the start of the US war against Iran and are trading 4-11.9% higher than a month ago

Last week, speculative price increases continued on US stock exchanges, driven by hot and dry weather in the main wheat-growing regions of the US, and on Friday prices rose another 2.2-3.9% in anticipation of US strikes on Iran.

Overall, quotes rose by 4-11.9% during the month amid speculative demand growth, but prices will quickly decline after the end of the Iranian strikes, especially amid forecasts of improved weather in the US.

On Friday, March wheat futures rose:

• by 3.4% to $217.25/t – for SRW wheat in Chicago (+11.9% per month),
• by 3.9% to $210.5/t – for HRW wheat in Kansas City (+6.7%),
• by 2.7% to $220.2/t – for HRS wheat in Minneapolis (+4%),
• by 2.2% to €197.5/t or $233.3/t – for wheat on Euronext in Paris (+3.9%).

Large funds reduced their net short position in Chicago wheat from 50,740 contracts on Tuesday to 17,297 contracts on Friday, the lowest level since October 2022. Specialty funds in Kansas wheat held their largest net long position since August 2023, increasing by 14,813 contracts, indicating speculators’ interest in regions of the United States experiencing drought conditions.

Over the past week, export purchase prices for food wheat in Ukraine increased by another 50 UAH/t to 10,600–10,700 UAH/t or $216–220/t, and for feed wheat – to 10,300–10,350 UAH/t or $209–211/t with delivery to Black Sea ports, supported by the growth in stock market quotes.

Further growth in prices for Ukrainian wheat will be limited by an increase in sea freight rates due to Iran’s closure of the Strait of Hormuz, so one should not count on a long-term increase in quotations.

Tags: prices, wheat