Pre-Opening Wheat Market Report

July wheat was up 8 1/2 cents late in the overnight session. Outside market forces look mostly negative. Deliveries for May wheat were 83 contracts his morning. The short-term weather turned supportive to the market over the weekend, as southern areas were dry, there was less rain in the forecast for the central and southern plains for later this week and more rain for the northern plains for later this week. Traders also saw a drier than expected weekend in European wheat areas and a drier forecast for the coming week as supportive. July wheat closed 7 3/4 cents lower on the session Friday and down 31 3/4 cents for the week. A turn lower on the outside market forces plus increased chances of rain for dry areas of the central plains in the 6-10 day outlook had helped to pressure the market. Again, some of this rain was taken out of the models over the weekend. The turn higher in the US dollar and weakness in soybeans helped cause a significant pullback from the early rally on Friday, and the market pushed to the lowest level since March 17th. Traders also see wet weather for the eastern Corn Belt as a factor which could cause crop conditions to deteriorate in some of the areas which have been flooded in recent weeks. News from Ukrainian officials that they will not impose curbs on exports if the harvest is favorable was seen as a negative factor. Russian wheat prices pushed a bit higher last week, and traders believe that exporters are buying up some wheat "just in case" the export ban is lifted early. Traders will be monitoring spring wheat planting progress for release after the close. There was more rain in North Dakota for the past week. Spring wheat plantings last week were only 22% complete. Last year by May 15th 77% was planted, and the 10-year average is 75% complete. The Commitments of Traders reports as of May 10th showed non-commercial traders were net long 19,565 contracts, a decrease of 3,562 for the week. The long liquidation selling trend of the fund trader is seen as a short-term negative force. Non-commercial and nonreportable traders combined held a net short position of 459 contracts. These traders have gone from a net long to a net short position during the week. Commodity index traders held a net long position of 209,650 contracts, down 7,551 contracts for the week, and the selling trend is a short term negative force.

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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