As of the middle of this month, wheat contracts for delivery in September are being offered on the Euronext exchange in Europe at about 4 euros per tonne above May contracts.
And on the U.S. CBOT exchange, the premium of July contracts to May contracts is about $3$/t. “Formally – this is a classic contango, i.e. a situation when far contracts are more expensive than near ones,” notes Victoria Blazhko, head of editorial content and analytics at ASAP Agri, in comments to Latifundist.com.
But for new crop grain sales, this structure is more of an exception. Usually it is the old crop that becomes more expensive at the end of the season due to a reduction in physical supply, while the new crop trades at a discount.
Therefore, the current premium is not just a technical signal. The market is already looking beyond the horizon of the season of record grain production in 2025/26 and begins to lay risks in grain prices in the marketing season 2026/27. And the main risks are lower production and lower “margin of safety” in key exporting countries, says the quoted source.
The 2025/26 season has so far been more than calm for the global wheat market. World production has reached a record 842 million tons, carryover balances are high, and the stocks-to-use ratio in key exporters – the US, Canada, Australia, Argentina, the EU, Russia, Ukraine and Kazakhstan – is around 18%.
Looking ahead, however, the market is less calm. Previous forecasts for 2026/27 signal about 7-8% production declines in the eight key exporting countries, equivalent to a reduction in their combined yields of about 32 million tons.
