The 2025/26 marketing year, June 01 to May 31, for Chicago Soft Red Winter (SRW) wheat shows a mixed supply and demand picture, with harvest occurring from late May to August, primarily in the U.S. South, Great Lakes, and Atlantic regions. The USDA's Economic Research Service projects that U.S. wheat ending stocks for 2025/26 will be the highest since 2019/20, up 10% from 2024/25, driven by larger beginning stocks. U.S. wheat exports are projected to be down by 20 million bushels, constrained by larger projected exports from competitors like the EU, Argentina, and Russia. Demand remains steady but faces headwinds from global competition, as SRW is the world's cheapest wheat, with funds holding net short positions since 2022. This competitive pricing stems from robust U.S. production and improved moisture conditions as crops enter the heading phase, which could keep prices subdued. Speculators should note the potential for volatility tied to inter-market spreads with other grains, while hedgers must monitor export demand and global stock levels to manage risk effectively.
The latest crop progress report indicates that the U.S. winter wheat harvest is 63% complete, slightly behind the 5-year average. Spring wheat is 78% headed, exceeding the average by 3%. The good to excellent condition rating for spring wheat increased by 4% to 54%, with notable improvements in Minnesota, Montana, North Dakota, and South Dakota. This abundance, especially in SRW, could flood the market and cause depressed prices.
