Wheat Weekly Comments May 10

Wheat Weekly Comments May 10

Wheat started the week by gapping lower on the opening bell and then extended session losses throughout the night session. Early selling was tied to better-than-expected weekend rains in the Southern Plains. Reports even had half of an inch of rain falling in southwestern KS. Technical selling was also evident early in the session, but that changed once wheat traded down to major support levels. Once the day session got under way, wheat was able to bounce off support due to dry forecasts for the Black Sea region as well as from spill over support from the stronger corn and soybean complex. Although traders are expecting to see little planting progress the afternoon’s Crop Progress report, weather forecasts are showing 2 more days of rain then dry conditions for the rest of the week. Wheat had a significant trading range today opening lower then rebounding to post solid double digit by the close. Most wheat months easily saw trading ranges between 30 to 50 cents.

On Tuesday wheat opened the overnight session lower and extended session losses throughout the night. But wheat was able to shake off the overnight pressure once the day session started and trade mixed. Early selling pressure was tied to Monday’s Crop Progress report which showed a slight improvement in the winter wheat’s crop rating. Light selling was also tied to improving weather forecasts, which have the Northern Plains drying out (in a few days) while the Southern Plains is expected to see rain (in a few days).

Losses were trimmed by the morning’s friendly Stats Canada March 31 Stocks estimate. The report put all wheat stocks at 11.76 MMT vs expectations of 12.2 MMT and vs 13.9 MMT last year. This is a 15% reduction year over year. Durum stocks were estimated at 1.65 MMT, a decline of 24% year over year.

In Wednesday’s session wheat opened the overnight session mixed with Mpls steady while the winter wheat exchanges were on the defense. More rain overnight and the thought spring wheat planting will continue to be delayed helped limit early losses in Mpls while forecasts calling for a general heavy rain for most of KS, OK, and TX next week pressured the winter wheat exchanges. The Wheat Quality Tour will take place next week. But ahead of that the OK Wheat Commission already surveyed their crop and is estimating OK production at 89.16 MB vs the OK Grain and Feed group estimated of 102.2 MB vs 68.6 MB last year.

On Thursday wheat opened lower in Mpls and Chicago but steady in KC. All three wheat exchanges were able to brush off early selling pressure and push to post double digit gains by the end of the night. Early support was due to technical buying as all three wheat exchanges bounced off support. Production concerns in the Black Sea region remain. IKAR lowered their wheat production estimate for Russia 2 MMT to 91 MMT. Russia has declared an emergency in three states due to recent frost damage. Rain remains in the forecast for the US Southern Plains but not in the forecast for the Black Sea. The Wheat Quality Tour will take place next week.

Producers continue to look to sell 30% of their old crop inventory at $7.35 July and price 10% of 2024 production at $7.47 Dec.

Support for July Mpls is at $6.35 while resistance is at $7.35.

For the week, July MW was at $7.20 up 5.5 cents, Sept Mpls was at $7.265 up 7.0 cents, July Chicago was at $6.635 up 41.0 cents, July KC was at $6.7325 up 23.0 cents.

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