Key Takeaways
- Bearish Pressure: The Buenos Aires Grain Exchange (BAGE) raised its 2025/26 Argentine wheat production forecast by 1.5 MMT to a record 25.5 MMT, adding significant export competition to global markets.
- Price Reaction: Paris (MATIF) December milling wheat futures fell to €187.25/t ($217.15/t), while Chicago (CBOT) December SRW wheat in a shortened session closed slightly higher at $194.37/t.
- Competitive Landscape: Argentine wheat is offered around $206–$209/t FOB, at a steep discount to Russian and EU/Black Sea origins, pressuring Black Sea exporters in key African and Asian demand centers.
- Additional Supply: The EU raised its wheat production estimate to 134.2 MMT and increased ending stocks, reinforcing the overall bearish global supply outlook.
Market Update
Global wheat markets turned lower in Europe on Friday after a strongly bearish supply update from South America. The Buenos Aires Grain Exchange (BAGE) increased its 2025/26 Argentine wheat crop forecast by 1.5 MMT to 25.5 MMT, citing strong yields across major producing regions. If achieved, this would mark an all-time record harvest for Argentina. Fieldwork is progressing steadily, with the harvest reported 34% complete as of November 26.
European futures reacted immediately to the heavier supply outlook. On the Paris MATIF exchange, December milling wheat futures settled at €187.25 per tonne, equivalent to about $217.15/t, reflecting renewed downside pressure. In contrast, U.S. wheat futures showed a mixed performance in a shortened session, with Chicago (CBOT) December SRW wheat edging slightly higher to close at $194.37/t.
The updated Argentine production forecast has reshaped the global export pricing landscape. While Russian wheat remains the most competitive origin within the Black Sea/EU corridor, Argentine export offers are now substantially lower on a FOB basis. This widening discount is sharpening competition in price-sensitive importing regions.
FOB Wheat Price Comparison
| Origin | Protein | Delivery | Price ($/t FOB) |
|---|---|---|---|
| Argentina | 11.5% | Dec/Jan | $206 – $209 |
| Russia | 11.5% | Dec/Jan | $224 – $226 |
| France/Romania/Ukraine | N/A | Dec/Jan | $227 – $229 |
Adding to the global supply picture, the European Commission raised its EU soft wheat production estimate by 0.8 MMT to 134.2 MMT and also increased projected ending stocks, signaling more comfortable availability into 2025. In France, winter wheat sowing is nearly finished at 98%, underpinning expectations for solid 2025 crop potential.
Analysis and Outlook
Outlook: Bearish
The prospect of a record Argentine wheat crop entering the world market at a steep discount is a distinctly bearish development for Black Sea exporters. With a price gap of roughly $20/t between Argentine and Russian FOB offers, Black Sea sellers will likely be forced to trim prices to defend market share or risk losing demand, particularly in highly price-sensitive destinations in Africa and Asia.
For importers, the current configuration provides strong negotiating leverage. Many buyers may adopt a “wait-and-see” strategy, anticipating that as the Argentine harvest advances and more supply becomes available, export values could soften further. Combined with upward revisions to EU output and stocks, this environment is expected to cap near-term rallies in Black Sea wheat and keep overall market sentiment tilted to the downside.
Source: Market Data
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