To start the week wheat gapped sharply higher at the start of the overnight session and continued to trade with solid gains throughout the rest of the session. Early support came from the released Fact Sheet by the White House indicating China has agreed to buy $17 billion in other ag goods a year for the next three years. The hope is wheat is part of the commodities that make up some of the $17 B. Light support came from weather forecasts that showed little to no rain for the Southern Plains over the past 7 days. Light rain is forecasted over the next 7 days as well, along with cool temps.
In world news, Russia is reporting slow planting progress due to cold wet conditions. The EU reports Poland has sold another 120 to 180 TMT of milling quality wheat to the US, which is expected to be shipped into the eastern ports this week. Friday’s COT report showed the funds trimming long position in Chicago but remaining long KC. Technically Sept MW has to close above $7.40 to keep the rally alive.
Wheat opened Tuesday’s session mixed with Mpls lower while the winter wheat exchanges opened with gains. Early activity was focused on the Crop Progress report. The report was slightly negative spring wheat; it showed solid planting progress. The winter wheat exchanges were supported by another lower-than-expected crop rating. By the end of the night wheat was posting gains due to continued support from the uncertainty surrounding the newly announced interest from China. The day session had wheat trading mixed, but by the close Mpls slipped lower due to planting progress while the winter wheat exchanges closed higher. Weather forecasts added support as cold temps are expected to dominate the Plains over the next few days. Some regions are expected to see freezing temps.
Wheat opened Wednesday’s session mixed with Mpls lower while the winter wheat exchanges started higher. Early pressure continued to come from Monday’s Crop Progress report, which showed good spring wheat planting progress and lower ratings for winter wheat. All three wheat exchanges were able to firm and end the night session with gains. Weather concerns helped to push wheat higher through the night as the Northern Plains (HRS) is dealing with frost, while the Southern Plains (HRW) deals with drought, and the Delta (SRW) deals with flooding. China released information on the summit stating that the US and China both agreed to lift the 10% tariff on imports. This would help put US grains on a more level playing field in China. Selling took charge once the day session kicked into gear with most of the pressure tied to spill over selling from a sharply lower crude oil market.
In Thursday’s session wheat opened steady to higher with early support coming from weather concerns. The Southern Plains continue to remain mostly dry (light rain fell in some regions of the Southern Plains) while the Delta region continues to experience flooding. Light selling pressure was due to CME increase in margin rates. The increase in margins is forcing the small traders out of their positions due to liquidity (they don’t have the money). Margin fluctuation is the best way to manipulate trading.
The Illinois Wheat Association toured the highest producing region for wheat production in IL this week. They are estimating the wheat production from that area at 102.8 bus vs 106.0 bus last year. Again, this is not a representative sample of wheat in the state, just the best producing region in the state. Wheat is searching for support and appears to be setting itself up to trade in a trading range as it waits for confirmation news on China. Wheat extended session losses late in the session as Thursday appeared to be a risk off session in the aga commodity sector.
Technically Sept MW has to close above $7.40 to keep the rally alive.
Hedgers target $7.85 to advance spring wheat sales.
July MIAX MW support is $6.75, Sept MIAX MW support is at $6.90, July Chicago wheat support is $6.25, July KC support is $6.60.
For the week, July Mpls MIAX was at $6.895 up 4.25 cents while Sept was at $7.1025 up 4.5 cents, July Chicago was at $6.47 up 12.5 cents, July KC was at $6.82 down 6.0 cents.
Wheat Weekly Comments May 22
Wheat Weekly Comments May 22
To start the week wheat gapped sharply higher at the start of the overnight session and continued to trade with solid gains throughout the rest of the session. Early support came from the released Fact Sheet by the White House indicating China has agreed to buy $17 billion in other ag goods a year for the next three years. The hope is wheat is part of the commodities that make up some of the $17 B. Light support came from weather forecasts that showed little to no rain for the Southern Plains over the past 7 days. Light rain is forecasted over the next 7 days as well, along with cool temps.
In world news, Russia is reporting slow planting progress due to cold wet conditions. The EU reports Poland has sold another 120 to 180 TMT of milling quality wheat to the US, which is expected to be shipped into the eastern ports this week. Friday’s COT report showed the funds trimming long position in Chicago but remaining long KC. Technically Sept MW has to close above $7.40 to keep the rally alive.
Wheat opened Tuesday’s session mixed with Mpls lower while the winter wheat exchanges opened with gains. Early activity was focused on the Crop Progress report. The report was slightly negative spring wheat; it showed solid planting progress. The winter wheat exchanges were supported by another lower-than-expected crop rating. By the end of the night wheat was posting gains due to continued support from the uncertainty surrounding the newly announced interest from China. The day session had wheat trading mixed, but by the close Mpls slipped lower due to planting progress while the winter wheat exchanges closed higher. Weather forecasts added support as cold temps are expected to dominate the Plains over the next few days. Some regions are expected to see freezing temps.
Wheat opened Wednesday’s session mixed with Mpls lower while the winter wheat exchanges started higher. Early pressure continued to come from Monday’s Crop Progress report, which showed good spring wheat planting progress and lower ratings for winter wheat. All three wheat exchanges were able to firm and end the night session with gains. Weather concerns helped to push wheat higher through the night as the Northern Plains (HRS) is dealing with frost, while the Southern Plains (HRW) deals with drought, and the Delta (SRW) deals with flooding. China released information on the summit stating that the US and China both agreed to lift the 10% tariff on imports. This would help put US grains on a more level playing field in China. Selling took charge once the day session kicked into gear with most of the pressure tied to spill over selling from a sharply lower crude oil market.
In Thursday’s session wheat opened steady to higher with early support coming from weather concerns. The Southern Plains continue to remain mostly dry (light rain fell in some regions of the Southern Plains) while the Delta region continues to experience flooding. Light selling pressure was due to CME increase in margin rates. The increase in margins is forcing the small traders out of their positions due to liquidity (they don’t have the money). Margin fluctuation is the best way to manipulate trading.
The Illinois Wheat Association toured the highest producing region for wheat production in IL this week. They are estimating the wheat production from that area at 102.8 bus vs 106.0 bus last year. Again, this is not a representative sample of wheat in the state, just the best producing region in the state. Wheat is searching for support and appears to be setting itself up to trade in a trading range as it waits for confirmation news on China. Wheat extended session losses late in the session as Thursday appeared to be a risk off session in the aga commodity sector.
Technically Sept MW has to close above $7.40 to keep the rally alive.
Hedgers target $7.85 to advance spring wheat sales.
July MIAX MW support is $6.75, Sept MIAX MW support is at $6.90, July Chicago wheat support is $6.25, July KC support is $6.60.
For the week, July Mpls MIAX was at $6.895 up 4.25 cents while Sept was at $7.1025 up 4.5 cents, July Chicago was at $6.47 up 12.5 cents, July KC was at $6.82 down 6.0 cents.