Pre-Opening Wheat Market Report

September wheat was up 10 cents late in the overnight session. Outside market factors look positive today with a weaker US dollar and higher equity markets. The market saw follow-through to the upside overnight after posting solid gains for the week last week. Traders see some tightening ahead for upcoming supply/demand reports with a push by livestock feeders to use more and more wheat. In addition, milling quality hard wheat for export might be in tight supply. While there appears to be an ample supply of wheat on the world market, high corn prices have helped support better than expected demand. In addition, traders are growing more and more concerned over the possibility that drought-busting rains do not emerge in the next month or so to alleviate drought conditions in Kansas, Oklahoma and Texas and that the La Nina weather trend could keep the region dry into next year. We are still 4-6 weeks away from planting the winter wheat crop, but traders indicate a need for several hefty rain storms to dent the drought. September wheat closed 1 1/4 cents higher on Friday and up 23 1/2 cents for the week. The market found support from outside market forces and a noted short-covering trend from fund traders for the week. The market slipped well off of the mid-session peak into the close with an inside trading session. Selling pressures emerged despite the positive tilt to outside market forces, as European wheat futures pushed lower and there was talk that the rally Thursday may have been overdone. The US rally helped to pull European wheat futures up to a positive close as well. Algeria bought 500,000 tonnes of optional origin wheat Friday, with some talk that the sale was made from France. Talk of improving wheat feeding usage ahead and short-covering helped support solid gains early. Ideas that Russia and Ukraine will continue to compete aggressively in the export market helped to limit the advance. With some poor weather this year, German wheat production is expected to be 22 million tonnes, down 7.5% from last year. Argentina weather has turned favorable for the wheat crop, but traders will watch for cold weather. Saudi Arabia bought 660,000 tonnes of wheat from Australia, the EU, Canada and the US. The Commitments of Traders reports as of August 9th showed non-commercial traders were net short 30,277 contracts, a decrease of 133 contracts for the week. Non-commercial and nonreportable traders combined held a net short of 53,927 contracts, down 540. Commodity index traders held a net long position of 198,968 contracts, down 9,361 for the week. For KC wheat, non-commercial traders held a net long of 42,353 contracts.

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.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.