Analysis: Wheat

Wheat Rallies into Close; US Dollar at New Lows for Move

Jul 20, 4:20 pm | Wheat

US wheat futures traded both sides of unchanged, ultimately ending slightly higher on currency changes and as fund profit taking may have run its course. The US dollar hit a new 10-month low, the euro hit a multi-year high which works to keep cash prices there elevated. And as for world prices, updated fob offers are below, and it’s clear that the Aussie market is beginning digest much lower yield potential. Very little rain is projected in Australia into August 1st.    US weekly export sales totaled 25 Mil Bu, better than expected and the highest of the marketing year so far. White wheat continues to be sold in abundance, but even HRS sales aren’t too far behind last year….

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Wheat Down Slightly; Long Liquidation Continues

Jul 19, 4:54 pm | Wheat

CBOT wheat ended steady, other classes ended lower as funds continue to exit recently established long positions – which, recall, were record large on KC and Minneapolis. It was another day void of fresh demand news, but our work continues to suggest downside risk is limited as problems worsen in Canada and Australia (and now frost in Brazil), and as global cash markets are starting to indicate issues in sourcing high protein/high quality wheat.   The graphic at left shows that soil moisture will continue to decline across the Canadian Prairies.   Cash markets in Europe and the US are little changed today, but the Russian market is higher as concerns mount with respect to protein levels at or above…

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Wheat Futures, Cash Markets Mixed Again

Jul 18, 4:06 pm | Wheat

Except for spring wheat, which rallied another 14 cents, wheat futures across the world ended slightly lower. There’s just not a lot of fresh news, and cash markets in the Black Sea are a bit weaker today as harvest advances. Still, a new 12-month high in the euro sent EU cash markets to modest gains, and Aussie replacement costs continue to surge amid intensifying drought in Western and South Australia.   Egypt secured 300,000 MTs of wheat from Russia, Romania and France at an average fob price of $204.40/MT, up fractionally from its purchase earlier this month, and actually is the highest in several years. As this often sets the world price, recent Egyptian validates elevated world cash prices.  …

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Long Liquidation Weighs on KC/CBOT Contracts

Jul 17, 4:52 pm | Wheat

Wheat futures ended mixed, with winter contracts losing 4-7 cents and spring wheat adding premium amid further declines in crop potential – and as dryness intensifies across the Canadian Prairies and Northern US Plains. Managed funds as of last Tuesday has established a record net long position worth 73,000 contracts in KC wheat, which has been partially liquidated in recent days as harvest rolls along.   US spring wheat crop conditions fell to 34% GD/EX, vs. 35% a week ago, and we mention poor/very poor ratings in SD and ND now rest at 74% and 40%, respectively. NASS is not yet finished with lowering US HRS production.   World cash markets are a bit weaker today amid strength in the…

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Wheat Stable; Concern Intact in Canada, Ukraine

Jul 14, 2:25 pm | Wheat

Wheat futures ended mixed, and on the week CME & KC contracts lost 24-30 cents but spring wheat ending unchanged. Fund selling has paused, and fundamentally, ARC continues to trim major exporter production, as evidenced by our updated Canadian outlook. Ukrainian wheat yields so far have been disappointing, and without improvement the USDA’s forecast may be lowered another 1-2 MMTs.   We also mention that, seasonally, a fairly lasting bottom should be posted in the next 1-2 weeks. The graphic attached displays the seasonal change from July 1 in interior Russian cash prices. Russia’s domestic market is up slightly this week, and in recent years a bottom has been found by late July/early. There’s also a fairly strong tendency for…

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Wheat Plunges Further; World Cash Market Also Weak

Jul 13, 4:41 pm | Wheat

Like corn, funds continue to exit long positions in wheat futures following bearish supply and demand data released on Wednesday. The graphic at left features managed funds’ net position in KC as of last Tuesday, and the rapid change warrants a bit of profit taking. We caution against chasing breaks, however, and the North American spring wheat issues won’t be solved by just 6 weeks of price action.   US weekly export sales totaled 13 Mil Bu, down 1 Mil from the prior week. Total 17/18 export commitments rest at 321 Mil Bu, unchanged from a year ago, and so pace analysis argues against any further reductions. A pace of 12-13 Mil per week is needed to hit the USDA’s target….

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Wheat Futures End Mixed; World Cash Market Much Stronger

Jul 11, 4:59 pm | Wheat

US wheat futures ended mostly flat ahead of tomorrow’s WASDE report – in which HRS and major exporter balance sheet will be most interest – but ARC notes that world cash markets continue to rally and that N Hemisphere weather patterns are little changed – and remains highly adverse in the US, Canada and Australia.   The graphic below shows updated world cash offers for spot and September delivery. US wheat is the world’s most expensive, but other markets are following and even Russian prices are sharply higher this week amid ongoing VAT rebate issues and a much slower than expected harvest. Russian farmers as of this week have gathered an estimated 5.7 MMTs of wheat, down 40% from the…

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