Ray Grabanski, Progressive Ag
Wheat The wheat complex continued its downward trend with continued harvest pressure in the winter wheat areas and a quiet export market. $5 support in Chicago failed with new support in the $4.85 range, while the $5.20 level in Minneapolis and the $4.30 level in Kansas City held. Matif Wheat futures were 2.0% lower to $174.75 per metric ton September with support at $173 per metric ton.
Wheat The wheat complex enjoyed an explosive day in July 11 trade with notable cuts to world production estimates in the monthly World Agricultural Supply and Demand Estimates report. U.S. ending all wheat stocks for 2019-20 were 1 billion bushels versus 1.038 billion bushels as the average trade guess. All wheat production is estimated at 1.921 billion bushels versus the 1.905 billion bushels average estimate and 1.903 billion bushels in the June report.
Wheat Stats Canada released its Principle Field Crop Areas report June 26th. All wheat acres planted are 24.6 million acres, down 0.6% from 2018. Trade was expecting 25.7 million acres. Spring wheat increased 8.4% to 18.8 million acres and durum declined 20.9% to 4.9 million acres. Barley acreage increased 14% to 7.4 million acres and oats primarily planted in Saskatchewan increased 18% to 3.6 million acres.
Wheat The wheat markets experienced a lower week as the Canadian prairie region received beneficial rainfall to ease some very dry conditions. Chart action was very poor in Minneapolis and Chicago. Support of $5.475 was breached in Minneapolis, as was $5.2575 in Chicago in June 19 trade. Kansas City support held at $4.5725. The Kansas City to Chicago spread has been historically wide at -65 cents in the July contract and -60 in the September contract.
Wheat The U.S. Department of Agriculture estimates U.S. all wheat production at 1.9 billion bushels, which was at the high end of trade estimates. The average trade guess was 1.883 billion bushels. Winter wheat production is forecast at 1.27 billion bushels with a national average yield of 50.5 bushels per acre. Hard red winter wheat production at 794 million bushels is up 2% from last month while soft red wheat production declined 2% to 258 million bushels. White wheat production is estimated at 222 million bushels.
Wheat The wheat markets experienced very choppy back and forth trade this week on drier weather forecasts that favored the breaking up of the wet cycle for the hard red winter wheat area, but expanded drought conditions in Canada.
Wheat The week started out higher as Memorial Day weekend rains saturated a band from eastern Kansas to the Great Lakes Region. Weekly crop progress report showed spring wheat is 84% planted compared to 91% for the five-year average. Trade was expecting 86% to 87%. Emergence of spring wheat is at 47% versus 69% average.
Wheat The wheat market shot higher early week on five-day forecasts showing a large storm system that will dump heavy rains from northern Texas through southwest Iowa. The heart of the hard red wheat belt including Kansas and Oklahoma looks to accumulate over 4 to 8 inches of rain, which is viewed as unfavorable for crop development.
Wheat Technical indicators are showing a possible bottom in the wheat complex. It doesn't happen very often in grains where we have a spike bottom (May 13 price action with a new low followed by a higher close). But these markets have been counterseasonal so far (lows in the spring during planting) so the bottom could be in. Generally, grain markets languish at lows for months at a time.
Wheat Spring wheat is 22% planted compared to 49% for the five-year average. Trade was expecting 25-26%. Spring wheat emergence is 4% compared to 19% for the five-year average.