According to Mercantile, thin demand ahead of the Northern Hemisphere harvest is presently the prime focus, but hi-pro supplies in North America is dwindling, and the new crop could be under threat. Building heat and dryness in the Northern U.S. shocked initial U.S. Spring wheat ratings, while there is no visible change to the dryness in China. Meanwhile, Mercantile says India is projecting a record crop. Mercantile would look for hard wheat to go higher.

According to Mercantile, there is an increasing number of production challenges arising, and the wheat market will increasingly focus on the weather. Mercantile says the trade is watching how production issues in some areas (Russia, China), will come against strong crops in other regions (the U.S., eastern Europe). Mercantile would continue to hold wheat sales for now.

Mercantile considered the WASDE bearish on wheat although it’s a long time before it is in the bin. World disputes continue, U.S. stocks are expected to rise, and U.S. wheat is very competitive and is attracting strong new crop demand. Mercantile says the UDSA expects imports by some of Canada’s top customers will be higher in the upcoming year (Indonesia, Philippines, Bangladesh, China) which could provide an opportunity for Canadian exports. Mercantile would leave the markets alone for the present.

Mercantile has a new WASDE report this Monday, where they expect the USDA to increase stocks and improve expected supplies of new crop wheat. Mercantile anticipates new crop markets to be a little lower, but old crop should strengthen with buyers coming back in. Mercantile doesn’t see any large moves by Funds and would remain non-sellers of Canadian wheat.

According to Mercantile, it was a slow week as various parts of the world take May 1, 2025, as a holiday. In the markets, soft red wheat easily remains the world's cheapest wheat and funds hold record shorts, but dryness issues persist in areas of Europe, parts of Russia and Ukraine, parts of Canada, and China. Mercantile says wheat could take a further rally and increase its value relative to corn. Mercantile would hold spring wheat sales for now.

According to Mercantile, Australian futures fell another A$6/mt as the AUD made a new four-month high close, while MATIF fell to new contract lows on slow demand, high stocks and generally favourable weather conditions. Rain has largely subsided weather concerns in most of the major wheat origins. So, Mercantile says world wheat markets remain under pressure by the absence of significant weather issues facing Northern Hemisphere crops and by slowing exports. However, Black Sea weekend forecasts are more widely dry and as prices retest lows, some short covering would not be a surprise.

Apr. 21

According to Mercantile, weakness of the U.S. dollar should help support U.S. sales, but demand continues to be slow. The attention of the trade will continue to turn towards new crop conditions and weather in the Northern Hemisphere. Mercantile is hearing of some strong targets being rewarded. If 75 per cent sold old crop, Mercantile would hold additional wheat sales for the present.

According to Mercantile, dryness in the U.S. winter wheat belt is supportive, but politics are weighing on U.S. futures. Mercantile adds that Canada is well positioned to service additional demand if buyers (especially from Asia) choose to switch from the U.S. in retaliation to the U.S. tariffs. Canadian cash prices should remain strong in Mercantile’s opinion, but this might have to come from stronger basis levels if U.S. futures remain depressed. Mercantile expects markets to remain volatile with Trump as president. Mercantile would continue to hold sales for now.

According to Mercantile, the Prospective Plantings report was supportive for wheat adding, the report is often incorrect, but it is the first public indication of U.S. seeding intentions. Mercantile says trade remains slow on both old and new crop, and unshipped old crop will add to new crop supplies and the lack of new crop demand does not make for an inspiring 2025/26 wheat market. Mercantile expects markets will continue to be more volatile with Trump as The U.S. President. They would continue to hold sales for now.