CBOT Wheat Market Momentum: Bargain Buying and Seasonal Dynamics in a Volatile Landscape

The CBOT wheat market in late 2025 presents a compelling case for short-term bargain buyers, driven by a confluence of oversupply-driven price compression, shifting speculative positioning, and seasonal demand dynamics. While global wheat prices have slumped to near five-year lows, the interplay of commercial hedging activity, speculative short-covering, and emerging supply risks suggests a potential inflection point for near-term momentum.

Price Compression and Oversupply Pressures

CBOT wheat futures have traded near $495 per bushel as of late September 2025, reflecting a 14.56% annual decline and a 3.91% monthly drop, according to Trading Economics. This bearish trend is fueled by record global production-808.5 million tonnes in 2025-led by Russia, Ukraine, and Canada, per the Commodity Board analysis. U.S. spring wheat harvests at 85% completion and Russia's projected 135 million metric ton output have exacerbated oversupply conditions, based on Trading Economics data. However, this price weakness has created a valuation gap, with wheat trading near levels last seen in mid-2020 amid pandemic-driven volatility, as shown by Macrotrends.

Speculative Positioning and Contrarian Signals

The latest Commitments of Traders (COT) report for September 23, 2025, reveals a critical divergence between commercial and speculative positioning. Commercial entities (large hedgers) held a net long position of 81,083 contracts, up 10.92% weekly, while large speculators maintained a net short of -81,682 contracts, according to the makarios COT report. This widening gap suggests that hedgers are locking in prices amid harvest uncertainty, while speculators remain bearish. Historically, such positioning extremes often precede reversals, particularly when commercial positions align with fundamental supply concerns, as noted in CME Group's seasonality guide.

Small speculators, meanwhile, have a net long of 599 contracts, indicating retail optimism amid discounted prices, per the makarios COT report. This contrasts with institutional shorting, creating a potential short-covering scenario if supply-side risks materialize.

Seasonal Dynamics and Supply Tightening

Seasonal patterns typically see wheat prices decline during harvest months (July–October) due to increased supply, only to rebound in the fourth quarter as stocks dwindle, according to the USDA Economic Research Service. However, 2025's seasonal trajectory has been distorted by bearish sentiment and high carry-out stocks. That said, emerging risks are reshaping this dynamic:
- European Production Woes: A 9% year-on-year decline in EU wheat output due to drought, reported in the MarketsFarm AM Report.
- U.S. Planting Delays: Winter wheat planting at only 5% completion, below historical averages, per the commodity-board update.
- Geopolitical Uncertainty: Russia-Ukraine tensions and U.S.-China tariff negotiations adding volatility, highlighted by U.S. Wheat Associates.

These factors suggest that the seasonal price rebound, usually observed in November, could be amplified if supply tightness emerges.

Investment Implications and Tactical Entry Points

For short-term traders, the current environment offers two key opportunities:
1. Bargain Buying on Oversold Conditions: With wheat near $495 per bushel, technical indicators (e.g., RSI below 30) suggest oversold conditions, as indicated on Barchart's seasonality chart. A breakout above $5.10 per bushel-last seen in mid-October-could signal short-covering and seasonal rebound.

1. Positioning Against Speculative Shorts: The large speculative short position (-81,682 contracts) represents a potential catalyst for upward momentum if fundamentals shift. Commercial longs (81,083 contracts) further reinforce this thesis (makarios COT report).

Conclusion

The CBOT wheat market is at a critical juncture. While near-term oversupply and speculative bearishness have driven prices to multi-year lows, shifting fundamentals-including planting delays, European production declines, and commercial hedging-point to a potential short-term reversal. Investors who recognize the interplay between speculative positioning and seasonal dynamics may find compelling entry points ahead of the critical November–December period.