Technically Speaking

Here in the first full week of October, I have lost count of the number of times I've had to write about the wheat markets falling to new contract lows. Whether it be the Kansas City, Chicago, or Minneapolis boards, each time it has felt like the market has been gaining steam, the fundamental picture has again turned bleak amid above-average production across the globe thus far for 2025, leaving traders in a sell-first, ask questions later mindset when it comes to wheat futures.

For the December Kansas City contract, this drove prices to yet a new low in late September, this time with an added bearish shock as prices fell to a closing price below $5 for the first time in five years for the most actively traded contract. Unfortunately, a five-year window doesn't accurately capture just how far wheat prices have fallen. Looking back to September 1990 and adjusting prices for inflation, there have been only five instances of monthly closing prices for the most active KC wheat contract falling below $5. In percentage terms, this represents roughly 1.2% of monthly closing observations over the 35-year period from September 1990 through September 2025. Analyzing nominal prices also puts current hard red prices into perspective, falling to the 11th percentile of observed monthly prices within the past decade.

Looking ahead, December KC prices will attempt to avoid a fifth straight lower monthly close, which in itself is also a rare bearish achievement, occurring only one time (October 2022 through February 2023) since the turn of the century. Commodity markets tend to be mean reverting, and the current oversold state of the market does offer some reason for optimism, even if price expectations will need to be realistic as long as the market remains more than adequately supplied. In the short to medium term, if the market can gain a footing back at the $5 mark, a move back toward the 50-day moving average (currently at $5.12 1/2 but dropping), shouldn't be out of the question.

Whoever coined the cliche "it's always darkest before the dawn" obviously didn't live to see the 2025 wheat market, which has been dark and gloomy from pretty much day one. That being said, however, I can't help but again find myself thinking the bottom is near. And, although prices could likely continue to face an uphill climb through the remainder of 2025 and into 2026, there is no denying the attractiveness of prices to U.S. and world buyers which could be a difference maker moving forward.

Comments above are for educational purposes only and are not meant as specific trade recommendations. The buying and selling of commodities, futures or options involve substantial risk and are not suitable for everyone.

Rhett Montgomery can be reached at rhett.montgomery@dtn.com

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