Pre-Opening Wheat Market Report

July wheat was up 3 3/4 cents late in the overnight session. Outside market forces looked mixed, as weak energy and metal markets and a positive tone for the US dollar clashed with a positive equity market outlook. Deliveries on second notice day for May wheat were 184 contracts, down from 460 on Friday. Some rains for eastern Oklahoma and Texas overnight helped to limit the advance, and mixed outside market forces could add to the volatility today. Traders see flooding issues in the Ohio River valley and northern delta region as a reason to suspect declining crop conditions for tonight's weekly update. This could be offset by slightly better conditions for parts of Kansas and Oklahoma. The focus of attention this week could be on industry crop tours across key winter wheat states. With the Kansas crop rated just 23% good to excellent last week, the market may need to absorb declining production forecasts ahead unless there are major shifts in the weather for the month of May. Very cold weather will drop south into the western areas of the plains, and flowering wheat could be at risk with freezing temperatures tonight. Traders see little or no damage from the cold. However, a resumption of the dry weather after the system of the past two days moves east could continue to threaten the southern plains crop. Lebanon is tendering to buy 50,000 tonnes of milling wheat. South Korea bought 275,000 tonnes of feedwheat over the weekend. July wheat closed 23 3/4 cents higher on the session Friday but was down 33 1/2 cents for the week. Short-term weather issues turned more negative, but it is still not clear whether there has been a change in the weather pattern that will allow for a recovery in the winter wheat crop. Some rains in Europe have eased stress concerns, and traders are also concerned that Russia and Ukraine will recover to become aggressive exporters of wheat on the world market this year. These factors plus aggressive selling from fund traders pressured the market for much of the week, but fund selling was absent Friday, and the market saw a solid recovery bounce. Strength in European wheat, a lower US dollar and ideas that the break Thursday was a bit overdone helped to support solid gains. Dry weather in China into the weekend and cold and wet weather in the forecast for the Canadian Prairies are seen as positive weather factors. Private exporters reported large sales of Pakistan wheat of 200,000-220,000 tonnes last week to various locations. Traders will monitor a crop tour of Kansas this week and also planting progress updates this afternoon. The Commitments of Traders reports as of April 26th showed non-commercial traders were net long 29,655 contracts, an increase of 3,628 for the week. The buying trend is seen as a short-term positive force. Commodity index traders held a net long position of 217,493 contracts, up 3,649 for the week.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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