Wheat futures fell sharply and again traded wildly in Minneapolis, as the market had become heavily overbought. Spring wheat remains a far less liquid market, and we expect further volatility in the weeks ahead. However, the market is far from accomplishing the goals of slowing high protein wheat consumption and attracting needed acreage in 2018/19, and it’s very unlikely that the market’s highs have been scored. Sharp declines in US spring wheat yield and harvested acres lie ahead, and some 60-80 Mil Bu of consumption needs to be eliminated altogether – which will be difficult.
World cash wheat remains firm, most notably in Northern Europe & the Black Sea. German wheat is offered today at $205/MT, basis spot, vs. $195 just weeks ago. Russian wheat is offered at $193-198 through October, vs. $165-175 during the same period a year ago. There’s little evidence to suggest the bear market will return in late summer/early autumn. We advise producers to await a test of $6.00-6.20, basis Sep CME, to advance sales. Sub-$5.00 wheat requires confirmation of expanding N Hemisphere winter wheat area this autumn.
