Written Commentary
London Wheat Report
Whilst Europe bathes in extremely high temperatures, markets are pricing in crop damage and yield losses. Agricultural agency reported today that weather conditions in mid-June were favourable for all agricultural crops across most of Ukraine, thanks to the absence of very high air and soil temperatures and periodic light rain. Relatively cool, rainy weather on most days helped the soil accumulate and retain moisture. However, such weather also contributed to the spread of fungal diseases on plants and to intensive weed growth. Ukraine has already started its 2026 grain harvest early.
The better news from Ukraine could counter some of the expected diminishing Russian wheat crop after Sovicon yesterday, downgraded their outlook on the Russian crop to 89M tonnes from 90.3 mmt. Total wheat area is now estimated at 25.8 million hectares, down from 26.4 million hectares previously and below the 26.9 million hectares planted in 2025- largely due to the lower spring acreage. This would mark the smallest total wheat area since 2014, when Russia planted 25.2 million hectares.
US markets are reluctant to take any real meaningful direction whilst export demand from China continues to be monitored, and the U.S. Midwest weather as crops approach crucial summer growth stages. There is also positioning ahead of the USDA quarterly stocks and acreage reports due later in the week, though some believe it may be too early for major repositioning. Weaker energy markets and a stronger US dollar also weighed on prices.
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