Blockade and drought support wheat price

The May wheat contract on the Matif closed €1 higher yesterday at €195,75 per ton. On the CBoT, wheat rose more strongly, closing 2%, or 11 cents, higher at $5.82 per bushel. Corn closed ¾ lower at $4.40 per bushel. Soybeans lost 13 cents during the recent trading session on the Chicago exchange, falling to $11.62 per bushel.

The situation in the Middle East continues to cause unrest in commodity markets. Negotiations between the US and Iran on how to proceed after the ceasefire broke down last weekend. A new round of negotiations is expected to start at the end of this week or the beginning of next week, a source within the Iranian embassy in Pakistan told Reuters.

Meanwhile, US President Trump has decided to impose a blockade himself on ships wishing to sail through the Strait of Hormuz. Nevertheless, since the blockade came into effect, two ships have sailed through the strait. The first left the Persian Gulf with 250.000 barrels of ethanol on board, loaded in the United Arab Emirates. The other sailed into the Gulf empty to load fuel oil, according to various news agencies. Reuters reports that both tankers are evading the American blockade because they are not going to or coming from Iran.

Guess
According to some experts, Trump is taking a risk with the blockade of Iranian ports. The ceasefire is fragile, and although the detention of merchant ships is not directly an act of violence, it could provoke a military response from Iran. On his platform Truth Social, Trump wrote that should Iran approach the American blockade with fast attack ships, these vessels would receive the same treatment as ships belonging to drug dealers in the Caribbean.

Smaller harvest Ukraine
However, we cannot fully attribute the rise in wheat prices to the blockade of the Strait of Hormuz. APK Inform lowered its estimate for the upcoming grain harvest in Ukraine by 400.000 tonnes to 58,2 million tonnes. By comparison, 61,1 million tonnes of grain were harvested in Ukraine in 2025 according to APK Inform. Of the grain harvest, 19.9 million tonnes are wheat, 31,5 million tonnes are maize, and 5,1 million tonnes are barley. The wheat export forecast has been significantly revised downwards from 14,5 million tonnes in the previous forecast to 13 million tonnes now.

Russia has reduced the export levy on wheat by 41% in a suspected attempt to boost exports. Exporters must now pay a levy of 329 rubles per ton (approximately €3,70 per ton). Market research firm Ikar expects Russia to export less grain in April than previously anticipated. The reason for this is not lower demand, but rather the bad weather during the first ten days of this month.

Wheat struggles due to lack of rain
In the US, the weather is not cooperating much for wheat growers in the southern Wheatbelt either. The eastern parts of states like Kansas and Oklahoma have had rain, but further west it has remained largely dry. The condition of winter wheat in the US has deteriorated slightly, according to this week's Crop Progress report. 34% of the acreage receives a rating of good or excellent, compared to 36% last week. That takes some getting used to after two relatively good wheat seasons. In 2022 and 2023, the winter wheat was in a less favorable condition. In terms of growth, winter wheat is slightly ahead, with 11% in ear this week compared to 7% in the five-year average.

Sowing of spring wheat is lagging slightly behind the multi-year average, with 6% sown this season compared to 7% in the five-year average. Of the planned barley acreage, 13% has been sown, compared to 10% in the average. Maize is also ahead of the five-year average, which stands at 4%, with 5% sown. This week, the first progress in soybean sowing was also included in the Crop Progress report. For oilseed, 6% of the planned acreage has been sown, compared to 2% in the five-year average.