Ray Grabanski, Progressive Ag
Wheat The spring wheat market continued its rally on harvest delays and quality concerns. The Chicago and Kansas City markets were largely subdued with normal fall planting progress being reported. Spring wheat harvested is at 87% compared to 97% for the five-year average. Winter wheat plantings are at 22% compared to 24% for the five-year average. Areas in northern North Dakota and northwestern Minnesota received 5 to 7 inches of rainfall over the past weekend.
Wheat The wheat markets experienced follow-through buying after setting multi-year lows last week and appear to be forming a bottoming formation. The U.S. dollar largely traded sideways as the September contract nears expiration.
Wheat The wheat market finally saw some buying this week after heavy deliveries pushed contracts to multi-year lows. Based on longer term nearby monthly continuation charts, the Kansas City market hit its lowest point since January 2006 and Minneapolis hit its lowest point since September 2009. For reference, the same continuation charts showed the U.S. dollar trading around $89 in January 2006 and $77 in September 2009.
Wheat The wheat market continued its slow downward bleed as harvest pressure pushed Minneapolis contracts to new lows each day this week despite respectable export pace. Matif wheat futures matched their recent contract low of $165.50 per metric ton September. The U.S. dollar resumed its uptrend from a weekly low of $97.37 to the $98.39 level. The Canadian dollar showed a downside reversal in Aug. 27 trade, but seems supported at the .7500 level. If it breaks under .7500, this will give Canadian spring wheat exports a leg up on the U.S.
Wheat Matif wheat futures hit a 16-month low at $165 per metric ton for September. The Russian ruble reached a six-month low, which is pushing Matif futures lower to give Europe a better shot at exports versus Russia. Essentially, it's been a race to the bottom the past month for the lowest offers despite lower Russian export and yield estimates. SovEcon estimates Russian wheat exports for July and August at 6.5 million metric tons, 25% below last year's brisk pace. The U.S. dollar traded sideways in a narrow range for the week between at $98 to $98.25.
Wheat The wheat markets were generally lower on the week with the exception of Chicago as spreading became the main feature. The funds are apparently buying Chicago and selling the Kansas City spread on anticipation of further declines to the soft red crop production estimates. The previous wide point of the spread was about 72 cents before narrowing to about 55 but now it has widened further to 80 cents. The sour tone started with Egypt tendering for wheat with no U.S. wheat being offered. Ukraine and Russia were the lowest bids.
Wheat The U.S. dollar traded 60 points higher after the Federal Reserve announced it would cut interest rates. As expected, the rate was cut a quarter of a percent.
Wheat The spring wheat tour completed its three-day trek across North Dakota and western Minnesota. Final yield was 43.1 bushels per acre, up 2 bushels per acre from last year's 41.1 bushels per acre. The tour sampled 356 fields. Durum yields were 7.3 bushels per acre lower than last year at 32 bushels per acre. Durum acreage declined 37% this year and scouts noted the smaller sample size. Scouts also noted that maturity is roughly one to two weeks behind normal.