On May 13 local time, CBOT soft red winter wheat futures closed slightly lower, with the benchmark July contract down 0.6% at 674.75 cents per bushel, trading between 667 and 683.25 cents. The price decline was mainly driven by long position profit-taking, after the previous session’s surge triggered by USDA’s sharp downward revision of U.S. wheat production estimates. As a core foundational ingredient for the baking industry, wheat price volatility directly impacts production costs and recipe adjustments for baking enterprises. This market uncertainty has become a key focus at Baking ingredient exhibitions worldwide, aligning with the industry’s current emphasis on ingredient quality and supply stability.

Before the profit-taking, wheat futures surged during Wednesday’s session, with the July contract touching a contract high of $7.50 per bushel, reflecting genuine market anxiety over drought impacts. KCBT hard red winter and spring wheat futures also hit contract highs. The USDA’s May supply and demand report projected U.S. wheat production at the lowest level since 1972 due to persistent drought across the Great Plains, with 2026/27 global stock estimates also below analyst consensus. During the annual Kansas Wheat Quality Council tour, inspectors projected significantly lower yields in the state’s northern half compared to last year. An Argus Media analyst noted: “The USDA typically takes a conservative approach in crop forecasts, but this May’s extreme downward revision for 2026 U.S. wheat production shocked the entire market.”

On the trade front, high prices led a South Korean company to make no purchases in a 65,000-ton feed wheat tender, while Jordan also failed to secure any deals at a 120,000-ton milling wheat tender before issuing a new one. Meanwhile, Asian flour mills returned to the market after a two-month absence to urgently book wheat cargoes, driven by concerns over tightening global supplies due to severe U.S. drought and dry weather forecasts linked to El Niño. Analysts expect El Niño to develop in the second half of 2026, potentially further reducing crop yields in Asia and Australia. A Sydney-based agricultural brokerage executive stated: “Farmers know supplies will tighten in six to eight months. With El Niño weather and rising input costs, they are stockpiling inventory.”

In the near term, CBOT wheat daily trading limits will revert to the standard 45 cents on Thursday, after being temporarily expanded to 70 cents following Tuesday’s limit-up move. The USDA will release its weekly export sales report Thursday, with analysts estimating net sales between 100,000 and 500,000 tons for the week ending May 7.

In the oils market, BMD crude palm oil benchmark July 2026 contracts fell for a third consecutive trading day. Dragged by weak CBOT soybean oil and lower Dalian Commodity Exchange palm oil futures, the benchmark contract closed down 57 ringgit or 1.27% at 4,424 ringgit per ton, briefly falling below the 4,450 ringgit threshold to hit a one-month low. The core pressure on palm oil prices stems from the tug-of-war between biodiesel demand logic and weak edible demand. Low crude oil prices have reduced palm oil's appeal as a biodiesel feedstock, while export demand lacks momentum. ITS data showed Malaysian palm oil exports up 8.5% month-on-month in early May, but AmSpec data showed a 10.8% decline, with conflicting figures leaving market direction unclear.

In domestic futures and spot markets, Dalian Commodity Exchange September soybean oil futures were flat at 8,547 yuan per ton, while September palm oil futures fell 92 yuan to 9,523 yuan per ton. Malaysian FOB quotes for 24-degree refined palm oil for May 2026 delivery stood at approximately $1,125 per ton. The Malaysian Palm Oil Board reported April-end inventories at 2.31 million tons, up 1.7% month-on-month, ending a consecutive decline and adding further pressure to futures prices. For butter and cream, European milk supply has shown no strong growth, with Middle East route diversions continuing to extend Asia-Europe baking ingredient shipping cycles. Rising global freight costs have kept landed costs for fermented butter and puff pastry butter at elevated levels, with no sign of near-term relief.

In sugar markets, ICE raw sugar futures maintained a weak, range-bound trajectory. The May 13 ICE raw sugar front-month contract was subdued, fluctuating narrowly between 14.8 and 15.0 cents per pound. Fundamentally, Brazilian Center-South crushing progress remains the core variable in the bullish-bearish tug-of-war. Early in the 2026/27 season, cane prioritization for ethanol production pushed the sugar mix to just 32.93%, down from 44.71% year-on-year, with sugar output falling 11.94%. Brazilian President Lula's push to raise gasoline ethanol blending from 30% to 32% further strengthens the ethanol production bias, making a near-term sugar mix recovery unlikely. Additionally, Green Pool has sharply raised its 2026/27 global sugar supply deficit forecast from 1.66 million tons to 4.3 million tons, with this forward supply gap supporting sugar prices at the medium-to-long term floor.

Bakery China 2026 will continue to share more industry professional content with you, so please stay tuned!

Bakery China 2026, organized by China Association of Bakery and Confectionery Industry (CABCI) and Bakery China Exhibitions Co., Ltd. was launched since 1997. Bakery China 2026 is the Asia Pacific’s leading event serving the entire value chain for the bakery and confectionery market. The event presents all range of ingredient, equipment, packaging and services, and enables global leading professionals and buyer delegates to meet and share the latest innovations and thinking on manufacturing & distribution, R&D, applications and related services for bakery industry. It is the first-choice trade fair to enter China’s bakery market.

The 2026 ASEAN International Bakery Exhibition (Bakery ASEAN), will be held on August 27-29 at JIExpo (Jakarta, Indonesia), co-located with renowned WEPACK Indonesia, Cafe Show Indonesia held by Reed Exhibitions Group, is a premier trade event focusing on the bakery and related industries in ASEAN and global markets. the shows will be covering 20,000 square meters, expecting more than 500 exhibitors and 50,000 professional buyers including distributors, imports and exports, manufacturers, chain stores, supermarkets, convenient stores, hotels and cafes, etc. from not only the ASEAN but also the rest of the world.

Source:https://mp.weixin.qq.com/s/3nQxNZtVVSVqL8cnUeavHg?scene=27&from=industrynews&color_scheme=light