Hedge funds raise wheat price bets as Middle East tensions grow
Market players expect higher wheat prices, but strong supply may limit gains.
GLOBAL – Hedge funds have increased their bets on rising wheat prices as tensions in the Middle East affect global fertilizer supply and raise concern across farm markets.
New data shows that funds trading on the Chicago Board of Trade raised their long positions in wheat futures to 117,375 lots in the week ending March 31. This marks the highest level in six years. At the same time, they reduced short positions to 108,734 lots. These moves show that many investors now expect prices to go up in the coming months.
A long position means traders buy contracts with the hope of selling later at a higher price. This recent shift signals growing confidence among speculators that wheat prices will rise.
Several factors support this view. Dry weather in the United States plains has raised concern about harvest levels in one of the country’s key growing regions. Lower output could tighten supply and push prices up.
Data from Trading Economics shows that wheat prices reached about US$6.1 per bushel in late March, which equals about US$0.24 per kg. This level sits close to the highest seen since October 2024.
The crisis linked to the war in Iran has also started to affect fertilizer markets. Products such as urea have seen supply pressure, which has led countries to secure fertilizer stocks for future crop cycles. Since fertilizer plays a key role in crop yields, any disruption can affect food supply and prices.
Despite these signals, some analysts remain cautious. The global wheat market still shows strong supply levels. The Food and Agriculture Organization reported on April 3 that most wheat planting for 2026 has already been completed.
The agency expects global production to reach about 820 million tonnes. This would mark a 1.7 percent drop from last year due to weaker prices and poor weather in regions such as the European Union, Russia, and the United States.
Even with this drop, output will remain above the five-year average. Global wheat stocks have also reached their highest level in five years. These high stock levels help ease pressure on prices.
Recent price data supports this balanced outlook. Wheat prices rose by only 4 percent between late February and early April, showing that supply strength still holds back sharp increases.
For now, the market stands between two forces. Supply remains strong, but risk from weather and fertilizer supply keeps traders alert.
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