In late May 2024, December Chicago wheat futures reached a price peak near $7.60. Over the course of June and early July, that marketplace shed nearly $2.00 in value with prices now finding solid support in the $5.50 area.

What’s happened

For nearly five weeks, December Chicago wheat futures have been trading in a lifeless 35-cent trading range. Regardless of global supply news regarding wheat, and no matter the geopolitical conflicts occurring in major wheat growing regions of the world, wheat futures remain unconcerned.

Will wheat futures continue to endure a sideways lull for prices at these historically lower values? Or will bargain buying begin?

From a marketing perspective

Looking at U.S. supplies of wheat, the Aug. 12 USDA report increased the all-wheat U.S. yield by a modest 0.4 bushels per acre, raising it to 52.2 bushels per acre.  This increase in yield was offset by lower harvested acres for all wheat. The USDA lowered harvested acres by 900,000 acres. The July report had harvested acres at 38.8 million, and the August report instead showed the lower value of 37.9 million acres.

The total wheat production number in the U.S. was then lowered to 1.982 billion bushels, down from 2.008 billion bushels on the July report. With the lower production, all-wheat ending stocks for 2024-25 also decreased to 828 million bushels, down from 856 million bushels on the July report.

While the reduction of ending stocks was supportive, the 828 number is still higher than the 702 million bushels from the 2023-24 season and noticeably higher than the 507 million bushels the industry saw in 2022-23. This is why wheat prices overall remain at lower values.

Globally, wheat demand remains strong despite the slightly reduced production. The end result is that global ending stocks for wheat for the 2024-25 crop year are now pegged at 256.62 million metric tons, down from 257.24 in the July report. This is down from 262.36 in the 2023-24 crop year, and also still down from 271.44 from the 2022-23 crop year.

Signs of new wheat demand around the world continue to pop up. Recently Egypt issued a tender to purchase 3.8 mmt of wheat, which would suit their needs from October through April. Many eyebrows raised as to why Egypt was looking to secure such a large amount of wheat for well into 2025.

Also announced recently was news that the Iraqi government approved a plan to build five grain silos in some of their provinces, which could store 300,000 tons of grain. Perhaps the recent upheaval in the Middle East region is imploring nations to secure food for their citizens.

Prepare yourself

While wheat futures seem content to just sit in a modest trading range for now, the global demand picture and lower global supplies of wheat are something that must not be ignored. And while past performance is not indicative of future results, it is also important to be aware of a seasonal pattern for December wheat futures that suggests prices begin to gain in value starting in mid- to late September.

The old adage of “low prices cure low prices” may currently be in the works for wheat futures.

Reach Naomi Blohm at 800-334-9779, on X (previously Twitter): @naomiblohm, and at [email protected].

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