After the long weekend, wheat opened the overnight session higher in all three exchanges but then faded the gains enough to trigger computer sell orders, which extended the session pressure into the end of the night session. Early support was due to technical buying as buying spilled over from last week’s impressive performance. But the gains were short lived this week as selling stepped in to push wheat into major support lines which resulted in a lot of weak longs to liquidate positions once technical levels were tested. Forecasts calling for rain in China’s major wheat region added pressure. Warmer drier conditions are expected to dominate the Northern Plains over the next 6 to 7 days, which is also negative as the region needs time to dry out and heat to get the crop to grow. Heavy rain in Argentina is not only slowing down harvest progress for corn and soybeans, but it is also slowing down planting progress for wheat.
In Wednesday’s session wheat gapped higher at the start of the overnight session and extended session gains throughout the night and into the start of the day session. Support was due to Tuesday’s surprisingly friendly Crop Progress report, which showed lower crop ratings than expected for both winter wheat and spring wheat. Winter wheat conditions slipped 2% to 50% g/e, 3% lower than expected by the trade and the lowest level in 6 years. Decreases in ratings were seen in OK (-10%), TX (-8%), and MT (-2%). The trade seemed to ignore the lower winter wheat conditions as harvest in TX and OK has begun.
Spring wheat conditions came in at 45% g/e, 37% fair, and 18% p/vp, the lowest rating for spring wheat at this time of year in over 37 years. The estimate was 26% below expectations and below the lowest trade estimate. Light support was also due Australia’s production estimate calling for wheat production in Australia to be near 30.3 MMT vs 34.1 MMT previously. Gains were erased in the winter wheat exchanges and trimmed in MW due to slow demand as well as from improving world weather conditions, especially in China.
On Thursday wheat opened the session steady to higher but slipped to trade mixed during the overnight session. Mpls were able to maintain small gains while the winter wheat exchange slipped to trade lower. Early support came from Tuesday afternoon’s crop progress report, which showed a much lower crop rating than expected for both spring and winter wheat. Weather forecasts calling for more rain for the Northern Plains added support. The winter wheat exchanges traded in a back-and-forth fashion for most of the session due to spillover pressure from the lower corn and sloppy soybeans. In world news, India officials are estimating wheat production to be as high as 117.5 MMT vs 115.4 MMT previously and vs 113.3 MMT last year. EU officials are estimating wheat production at 126.6 MMT vs 126.3 MMT previously and vs 111.7 MMT last year.
Target $6.65 to advance sales.
For the week, July Mpls were at $6.255 up 19.0 cents, July Chicago was at $5.34 down 8.5 cents, July KC was at $5.3325 down 5.5 cents.
For the month, July Mpls were up 28.5 cents, July Chicago was up 3.25 cents, July KC was up 3.75 cents.
Wheat Weekly Comments May 30
Wheat Weekly Comments May 30
After the long weekend, wheat opened the overnight session higher in all three exchanges but then faded the gains enough to trigger computer sell orders, which extended the session pressure into the end of the night session. Early support was due to technical buying as buying spilled over from last week’s impressive performance. But the gains were short lived this week as selling stepped in to push wheat into major support lines which resulted in a lot of weak longs to liquidate positions once technical levels were tested. Forecasts calling for rain in China’s major wheat region added pressure. Warmer drier conditions are expected to dominate the Northern Plains over the next 6 to 7 days, which is also negative as the region needs time to dry out and heat to get the crop to grow. Heavy rain in Argentina is not only slowing down harvest progress for corn and soybeans, but it is also slowing down planting progress for wheat.
In Wednesday’s session wheat gapped higher at the start of the overnight session and extended session gains throughout the night and into the start of the day session. Support was due to Tuesday’s surprisingly friendly Crop Progress report, which showed lower crop ratings than expected for both winter wheat and spring wheat. Winter wheat conditions slipped 2% to 50% g/e, 3% lower than expected by the trade and the lowest level in 6 years. Decreases in ratings were seen in OK (-10%), TX (-8%), and MT (-2%). The trade seemed to ignore the lower winter wheat conditions as harvest in TX and OK has begun.
Spring wheat conditions came in at 45% g/e, 37% fair, and 18% p/vp, the lowest rating for spring wheat at this time of year in over 37 years. The estimate was 26% below expectations and below the lowest trade estimate. Light support was also due Australia’s production estimate calling for wheat production in Australia to be near 30.3 MMT vs 34.1 MMT previously. Gains were erased in the winter wheat exchanges and trimmed in MW due to slow demand as well as from improving world weather conditions, especially in China.
On Thursday wheat opened the session steady to higher but slipped to trade mixed during the overnight session. Mpls were able to maintain small gains while the winter wheat exchange slipped to trade lower. Early support came from Tuesday afternoon’s crop progress report, which showed a much lower crop rating than expected for both spring and winter wheat. Weather forecasts calling for more rain for the Northern Plains added support. The winter wheat exchanges traded in a back-and-forth fashion for most of the session due to spillover pressure from the lower corn and sloppy soybeans. In world news, India officials are estimating wheat production to be as high as 117.5 MMT vs 115.4 MMT previously and vs 113.3 MMT last year. EU officials are estimating wheat production at 126.6 MMT vs 126.3 MMT previously and vs 111.7 MMT last year.
Target $6.65 to advance sales.
For the week, July Mpls were at $6.255 up 19.0 cents, July Chicago was at $5.34 down 8.5 cents, July KC was at $5.3325 down 5.5 cents.
For the month, July Mpls were up 28.5 cents, July Chicago was up 3.25 cents, July KC was up 3.75 cents.