Wheat futures surged past $5.40 per bushel on Monday, reaching their highest level since July 22, as reports of fresh Chinese inquiries into U.S. wheat cargoes reignited hopes of a demand revival from one of the world’s largest importers.

The rally came after a major Chinese grain importer reportedly asked about U.S. wheat shipments scheduled between December and February, according to trade sources familiar with the matter. If confirmed, this would mark China’s first potential U.S. wheat purchase in over a year, following the trade truce announced last week between President Donald Trump and President Xi Jinping.

Chicago Board of Trade (CBOT) wheat futures climbed 1.6% to $5.42 per bushel, their highest since midsummer, as traders priced in the prospect of stronger export flows.

China’s Return Sparks Optimism in U.S. Farm Sector

China’s renewed interest represents a significant shift in sentiment for U.S. agricultural exporters. According to U.S. Department of Agriculture (USDA) data, China has not bought American wheat since October 2024, when tensions between Washington and Beijing led to a suspension of grain purchases.

The recent thaw in relations, which saw both countries agree to remove tariffs and expand agricultural trade, could provide a timely boost to U.S. farmers heading into winter.

“China re-entering the U.S. wheat market is a powerful symbolic and economic development,” said Thomas Hinds, agricultural economist at AgriTrade Analytics. “It suggests the trade truce is starting to translate into real activity — even if the initial volumes are modest.”

However, Hinds noted that buyers in China often “test the waters” before committing to large volumes, meaning actual purchase contracts could take weeks to materialize.

Global Production Outlook May Cap Price Gains

Despite the bullish mood, analysts warned that ample global supply could temper any sustained rally.

Russian consultancy SovEcon raised its 2025 wheat production forecast to 87.8 million metric tons, citing record yields across Siberia and the Volga region. The figure underscores Russia’s continued dominance in global wheat exports, even as sanctions and logistics challenges persist.

Meanwhile, Argentina’s output is projected at 23 million tons, matching its record 2021–22 harvest, bolstering Southern Hemisphere supply ahead of the new export cycle.

“These production upgrades are a clear reminder that while U.S. demand could rise, the world is still well-supplied,” said Sarah Klein, commodities strategist at RaboResearch. “The risk of price spikes is muted unless there’s a weather event or a significant supply disruption.”

U.S. Crop Progress and Market Fundamentals

In the United States, traders are monitoring planting progress and export data for additional direction. The USDA’s Crop Progress Report — delayed amid the ongoing government shutdown — is expected to show that 84% of U.S. winter wheat planting is complete, broadly in line with historical averages.

Export pace remains subdued but could accelerate if Chinese demand materializes. The USDA’s next World Agricultural Supply and Demand Estimates (WASDE) report, due later this month, will provide a clearer picture of trade flows following the Trump-Xi agreement.

Market Perspective: Sentiment Versus Supply

While short-term optimism has returned to the wheat market, traders remain cautious about calling a sustained uptrend. The commodity is up 5.8% in the past month but still 4.6% below year-ago levels, reflecting lingering weakness from oversupply and sluggish global consumption.

“Wheat is caught between bullish trade headlines and bearish supply realities,” Klein said. “If China follows through with purchases, we could see another leg higher — but if Russian and Argentine exports stay strong, the rally may stall near $5.50.”

As of November 3, 2025, benchmark wheat traded at $5.43 per bushel, while the long-term historical peak remains $13.50 per bushel, reached in March 2022 during the early months of the Russia-Ukraine conflict.