Commodity markets have experienced a dizzying day in which European wheat has capitulated to factors unrelated to harvests. The apparent easing in Iran has been enough to trigger a sharp drop in oil, causing a domino effect that has dragged Euronext (MATIF) cereal futures to lows not seen in a year.
While wheat and rapeseed suffer corrections, corn is the only one managing to hold its ground with slight increases. Traders are now focusing all their attention on the evolution of the conflict in the Middle East. In this critical phase, the market has been configured as a board where each news item regarding energy supply or any shift in the Washington-Tehran relationship can trigger sharp movements in European exchanges.
The wheat price in the European reference market has lost the support of 200 euros per ton, hitting lows of 199 euros per ton. The most active contract for May 2026 finally closed at 202.25 €/t, solidifying a downward trend that concerns importers. This extreme volatility confirms that the price of bread is now determined more in presidential offices and oil terminals than in the fields themselves.
The key to this crash lies in the intensification of the correlation between oil and wheat. The fall in crude disincentivizes the use of crops for biofuels and eliminates the appeal of wheat as a hedge against inflation. In this new paradigm, the cereals market has ceased to respond solely to climatic variables to become a hostage of international energy politics and currency movements.
Geopolitical pressure is compounded by a monetary factor that is deadly for European competitiveness: the strength of the euro against the dollar. This scenario raises the price of EU wheat in the international market, facilitating competitors like Russia to continue dominating global exports. With a still abundant global supply, European exporters are finding serious difficulties in placing their surpluses, which reinforces the structural bearish bias of the market.
