Ray Grabanski / Progressive Ag
Wheat The wheat markets saw plenty of fireworks during the Fourth of July Week. On July 5, September Minneapolis traded to a high of $8.68 then reversed to a low of $7.74 before closing 3 higher. The following day, September closed 50 cents lower in a sharp sell off. The big question now is, have we had a potential market top?
Wheat We thought this could happen and we've been writing about it since last fall. The odds of the five major wheat producing countries all having a repeat of 2016 record yields were very low. In 2017, the pendulum is swinging wildly the other way. Currently the key wheat growing regions of western Australia are experiencing drought. The Ukraine and Europe have been experiencing drier than normal conditions. Canada and the northern U.S. are experiencing moderate drought. World weather has changed dramatically in just three months.
Wheat The wheat markets went different directions this week with Minneapolis contracts experiencing heavy buying on dry conditions, and Chicago/Kansas City contracts softening up as harvest begins. The Minneapolis premium has widened another 25 cents to $1.54 premium over Chicago and Kansas City pointing to a continued need for higher protein wheat in 2017-18.
Wheat The wheat market was softer early week on improved crop condition ratings for winter wheat. Crop condition ratings released May 22 show 72 percent of the winter wheat crop is headed compared to 67 percent for the five-year average. Winter wheat conditions are 52 percent good to excellent versus 51 percent last week and 62 percent last year. Poor to very poor conditions decreased to 15 percent from 17 percent last week and 8 percent last year.
Rains in European wheat growing regions and the Black Sea region sent wheat contracts lower early in the week. Weekly crop condition ratings released May 15 point to an "average" U.S. winter wheat crop despite the western Kansas weather event.
Wheat The exceptional pace of spring wheat plantings in the Northern Plains and central Canadian provinces were enough to send the trade lower on the week. Fully 25 percent of the crop went in for the week ending May 7 with good weather ahead. There have been a few market reports about millers being concerned about sourcing high protein wheat. They should have thought about that before failing to bid up Minneapolis futures prior to spring planting when federal crop insurance rates clearly favored soybeans.
Wheat Typically we get a Kansas frost fear event during the spring season. The wheat complex got that and more this week as a system dumped heavy snows over western Kansas and eastern Colorado the weekend of April 29-30. Kansas City contracts traded near limit up in May 1 trade with 29-cent gains. A member of the Kansas Wheat Commission stated, "We lost the western Kansas wheat crop this weekend."
Wheat The wheat market had a firm undertone this week on delayed planting prospects for spring wheat and cold temperatures in the Southern Plains that brought up the potential for crop damage to winter wheat. Six-to-10-day forecasts calling for additional rain and below normal temperatures gave the longs the advantage. The Kansas wheat tour starts next week, so there will be plenty of scouting reports and rumors.
Wheat The spring wheat market had a boost early week on delayed planting fears but gave up all those gains in an April 20 session sell off. Favorable forecasts in the south central U.S. have trade less concerned about winter wheat development. Trade is also discounting late planting spring wheat fears.
Wheat Wheat was higher for the week rebounding off recent lows, but Chicago and Kansas City backed off in April 13 trade on six to 10 day forecasts calling for rain throughout a swath from Kansas City to Detroit. The exact opposite is occurring on the French and British grain exchanges as wheat contracts are approaching highs last seen in May 2014. Lack of snowpack and now lack of spring rains through much of Europe has the market excited.