There was a brief spark in the wheat market overnight after Russia’s Deputy Agriculture Minister revealed that the country’s sown wheat area for the 2026 season is expected to fall 6.2% to 28.2 million hectares. Prices below the cost of production in many regions are clearly starting to bite.
In what should have been a major market mover, a Russian drone strike on the key deep-sea port of Odessa initially pushed prices higher, but the rally quickly faded as the session wore on. Traders largely attributed the reversal to a stronger US dollar, which gained against a basket of major currencies. While US SRW and HRW wheat remain among the cheapest origins globally, the firmer greenback may begin to dampen importer interest in US supplies.
Meanwhile, the US government shutdown has entered its second week, halting the release of key USDA data. This week’s WASDE report has been suspended indefinitely, creating a significant information vacuum in fundamental supply and demand data. Without USDA updates, market participants will need to rely more heavily on reports from other exporting nations to guide price direction. The shutdown also interrupts updates on US corn and soybean harvest progress, leaving room for speculation on final yields, and adds uncertainty around Northern Hemisphere planting prospects as analysts turn to weather models for insight.
China has maintained its 2026 wheat and corn import tariff quotas at the same levels as the prior year, with wheat set at approximately 9.64mmt and corn at 7.2mmt. The pleasing thing about this is that the announcement has been made early, whereas last year the quotas were not released until later in the year, which kept the trade guessing and resulted in some stem positions being pushed back. It is important to note that the quotas are not a guaranteed import volume, but rather a framework that Chinese importers can work within depending on their appetite.
The week ahead….
Overall, the market remains caught between loose fundamentals and economic headwinds. While production cuts and geopolitical risks offer support, a firm US dollar and the absence of key USDA data are keeping traders cautious and price moves subdued.
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Wheat’s false start as Russian cuts spark
In what should have been a major market mover, a Russian drone strike on the key deep-sea port of Odessa initially pushed prices higher, but the rally quickly faded as the session wore on. Traders largely attributed the reversal to a stronger US dollar, which gained against a basket of major currencies. While US SRW and HRW wheat remain among the cheapest origins globally, the firmer greenback may begin to dampen importer interest in US supplies.
Meanwhile, the US government shutdown has entered its second week, halting the release of key USDA data. This week’s WASDE report has been suspended indefinitely, creating a significant information vacuum in fundamental supply and demand data. Without USDA updates, market participants will need to rely more heavily on reports from other exporting nations to guide price direction. The shutdown also interrupts updates on US corn and soybean harvest progress, leaving room for speculation on final yields, and adds uncertainty around Northern Hemisphere planting prospects as analysts turn to weather models for insight.
China has maintained its 2026 wheat and corn import tariff quotas at the same levels as the prior year, with wheat set at approximately 9.64mmt and corn at 7.2mmt. The pleasing thing about this is that the announcement has been made early, whereas last year the quotas were not released until later in the year, which kept the trade guessing and resulted in some stem positions being pushed back. It is important to note that the quotas are not a guaranteed import volume, but rather a framework that Chinese importers can work within depending on their appetite.
The week ahead….
Overall, the market remains caught between loose fundamentals and economic headwinds. While production cuts and geopolitical risks offer support, a firm US dollar and the absence of key USDA data are keeping traders cautious and price moves subdued.
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Data sources: Reuters, USDA, StoneX, Next Level Grain Marketing, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.