Key insights
- Euronext wheat futures surged following a USDA report projecting the smallest US wheat crop in decades due to drought. This, coupled with lower global stock estimates and rising oil prices due to disrupted US-Iran talks, adds inflationary pressure. While the direct impact on US equities is limited, it contributes to broader concerns about food price inflation and supply chain vulnerabilities.
Investing.com -- Euronext wheat futures climbed on Tuesday, tracking gains in Chicago as the U.S. Department of Agriculture projected the smallest American wheat crop since 1972, raising concerns about drought damage in the U.S. Plains.
September milling wheat, the most-active contract on Paris-based Euronext, settled 4% higher at 216.50 euros a metric ton. The contract posted a second consecutive day of gains after reaching a two-week low on Friday.
The USDA forecast for the 2026/27 season fell below trade expectations. The department also estimated global wheat stocks for 2026/27 below average analyst projections, citing reduced output across several major producing countries.
Chicago wheat surged over 6%, while Kansas wheat jumped by its daily limit.
Wheat prices had already gained earlier in the session after the USDA on Monday lowered its weekly rating for U.S. crop conditions.
Rising oil prices provided additional support to grain markets as stalled U.S.-Iran peace talks threatened continued disruption to energy and fertilizer supplies through the Strait of Hormuz.
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