Wheat futures rallied sharply on Wednesday, with contracts across Chicago, Kansas City, and Minneapolis posting gains of 15 to 22 cents amid escalating geopolitical tensions in the Black Sea region and overnight US strikes on Iran. The rally extended gains from Tuesday, when open interest rose, signaling fresh buying interest.
Geopolitical Sparks Drive Rally
Russian exports through the Kerch Strait remain constrained following last week's reported restrictions, and overnight Russia struck port locations in Odesa, Ukraine in retaliation for recent Ukrainian attacks on Russian tankers in the Sea of Azov. Separately, US strikes on Iran overnight hit a wheat storage facility, adding further supply concerns. These developments have fueled fears of disrupted grain flows from one of the world's key exporting regions.
Crop Progress and Export Data
The USDA's NASS Crop Progress report showed 67% of the US winter wheat crop harvested by Sunday, six percentage points ahead of the five-year average. Spring wheat was 72% headed, in line with the normal pace, with 58% rated good to excellent, up one percentage point. However, the Brugler500 index slipped three points to 351. State-level ratings saw Montana drop 18 points, while Idaho and South Dakota each fell seven; improvements were noted in Minnesota (up eight) and North Dakota (up six).
Taiwanese importers purchased 98,150 metric tons of US wheat overnight. Meanwhile, EU wheat exports in the first 12 days of July totaled 214,904 metric tons, according to EU Commission data, down from 260,897 metric tons in the same period last year.
Price Levels
At midday, September Chicago SRW wheat traded at $6.45, up 18 1/4 cents from Tuesday's close, while December was at $6.59 3/4, up 17 1/2 cents. September Kansas City HRW jumped 22 1/2 cents to $6.78, and December rose 21 cents to $6.92 1/2. Minneapolis spring wheat for September gained 15 1/2 cents to $6.58, with December up 16 1/4 cents to $6.78 1/4.