Pre-Opening Wheat Market Report

December wheat was down 7 1/2 cents late in the overnight session. Outside market factors look negative today with a strong US dollar and weakness in equity markets and other agricultural markets. The sharply lower price that Russia sold wheat at in their last tender to Egypt plus a continued selling trend from fund traders helped to drive the market sharply lower last week, and the selling looks to continue at least at the start of this week. Talk that the rain in the southern plains was a little better than expected over the weekend plus the surge higher in the US dollar are also seen as negative forces to start this week. December wheat closed 7 3/4 cents lower on the session Friday and down 41 1/2 cents for the week. Talk of smaller spring wheat harvested acres for the end of the month's small grains production report from the USDA due to lower Farm Service Agency data released Thursday and talk of the short-term oversold condition of the market helped to support the early bounce on Friday. However, the market was unable to move above Thursday's highs, and speculative selling emerged with the break in the other grain markets to pressure wheat futures into the mid-day. While the southern plains received rain over the weekend, traders believe the region needs a lot more rain to get the crop planted and off to a good start this fall and the extended forecast is a bit dry. The plains look dry this week, and the 6-10 day and 11-15 day models are also showing below normal precipitation. Dryness is also a developing issue in Ukraine and Argentina, but Argentina received good rain over the weekend. However, the wheat growing areas look dry for the next week or more. The Commitments of Traders reports as of September 13th showed non-commercial traders were net short 25,449 contracts, an increase of 23,113 contracts for the week. The aggressive selling trend from fund traders is seen as a short-term negative force. Non-commercial and nonreportable traders combined held a net short position of 48,009 contracts. This represents an increase of 21,225 contracts in the net short position for the week. For Kansas City wheat, the non-commercial trader was still net long 51,144 contracts, down 3,985 for the week. Algeria bought 450,000 tonnes of optional origin milling wheat over the weekend. Tunisia bought 92,000 tonnes of soft milling wheat and 25,000 tonnes of durum wheat.

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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