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Serving Lincoln County for more than a century!
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Recently wheat markets have been trying to find a bottom along with the rest of the grain markets. The driving force behind the sell-off that began in December has been the rally in the U.S. Dollar which recently reached 11 year highs. Instability around the world and steady economic growth in the U.S. have combined to once again make the Dollar the standard for the rest of the world. As a result, commodities in general and grains in particular have felt the negative effects of a stronger U.S. Dollar. Investors continue to...
Over the last month and a half the grain markets have been on quite a roller coaster along with other financial markets, with a ripple effect occurring from sharply lower oil prices. Overproduction of oil and Saudi Arabia's refusal to lower its production has caused crude oil prices to be cut in half from the summer high of $110/barrel. Crude oil today is trading at $48/barrel. An unseen consequence of this was the very negative effect on the Russian economy. The sanctions that the west put on Russia after its annexation of...
Wheat markets have continued their recent rally which started at the end of September. Wheat futures have rallied more than $.70 from their lows. Corn futures have risen $.50 off their lows. The cash markets have also moved higher with Soft White back to their August prices. The rally in the futures has been the main driver of the rise in the cash markets and one of the main factors has been the weakness in the U.S. dollar. As mentioned in the last Market Perspective article, the weakness in the U.S. dollar and the pullback...
Wheat markets have enjoyed a little bit of a bounce over the last 10 days. Cash markets are about $.20 off their lows and future markets are about $.30 off their lows. Part of it has been a correction from oversold technical conditions, part of it has been a stabilization of world wheat prices, but most of this correction has been due to the weakening of the U.S. dollar. The dollar has had an impressive rally since July and that in turn pressured commodities in general and wheat in particular. Last week Chicago wheat futures...
Wheat markets, especially the futures markets, have remained under pressure the last few weeks. Increasing world supplies, a record upcoming corn harvest and a stronger U.S. dollar have encouraged speculative funds to increase their short positions in the Chicago wheat futures to nearly 400 million bushels. World wheat prices have also been pressured by aggressive pricing out of the Black Sea, as the unrest between the Ukraine and Russia has weakened both of their currencies, making their exports even cheaper, relative to the...
By PEARSON BURKE Wheat markets continue to consolidate. On the charts, Chicago wheat has formed a double bottom; we will see if that holds. If so, then the downtrend has been broken and at least a sideways pattern can be expected. From a seasonal standpoint, the wheat market is due for a break from the selling that we have seen for the last 3 months. Fundamentally, last Tuesday's USDA Crop Production Report changed U.S. wheat carryovers for next year only slightly. But world wheat carryovers were raised 3.5 million metric...
Grain markets continue to feel the pressure from export competition for wheat sales and impending large corn and soybean crops. The last couple of USDA Crop Reports have done nothing to break the downward trend that the grain markets have experienced over the last two months. The Grain Stocks and Planting Intentions Report, which came out on June 30, showed corn stocks about 130 million bu higher than expected. Soybean acres are projected to be a record 84.8 million. Since then, the weather in the cornbelt has been just...
The wheat markets have been in a hard correction ever since the May USDA Crop Production Report came out a month ago. Before that the market experienced a strong rally supported by the deteriorating crop conditions of the Hard Red Winter Wheat crop in the Southern Plains and the unrest in the Black Sea between the Ukraine and Russia. As is so often the case, it was not the crop report itself that caused the market to reverse but more the idea of "buy the rumor, sell the fact". The report made traders take a step back and...
The rally in the wheat market marches on as the two main reasons for this contra seasonal rally continue to support prices. First, the drought and now record high temperatures in the Southern Plains continue to stress the winter wheat crop there and second, the conflict in the Ukraine continues to intensify. Both stories now have the full attention of the market. Speculative funds, who not too long ago held a record short position in Chicago wheat, are now net long about 100 million bu., heading into this Friday's USDA Crop...
The weather market has begun in earnest. Over the last month the futures have had quite a few twenty cent trading sessions. Some has been due to the continuing confrontation between Russia and the Ukraine, but most of it has been due to weather forecasts and the USDA Crop Progress Reports which have started to come out every Monday afternoon. The latest Crop Progress Report showed the overall U.S. winter wheat crop rated at 34% good to excellent and 33% poor to very poor, about the same as last week and about the same as a ye...
The wheat market has continued to rally over the last three weeks, resulting in marketing year highs for both old and new crop prices. New crop prices are now at higher levels than what most people sold this year's crop. When wheat markets were at their low at the end of January, the speculative funds were holding a short position in the Chicago futures of over 550 million bu. The size of last year's Soft Red Winter Wheat crop was 560 million bu. At that time China, Egypt and Iraq, along with other buyers, stepped into the...
The rally in grains has continued over the last two weeks. Dry conditions in the Southern Plains and decent export demand have finally forced the speculative commodity funds to cover about half of their record short position in the wheat futures. Corn and soybeans have also moved higher as investment funds have lightened their positions in equities and shifted some of their funds back into the commodity markets. Technically the market is now overbought and possibly due for a technical correction at some point. On the...
Wheat markets finally reacted positively after a USDA Crop Report. Monday's report showed a 50 million bu decrease in carryovers from the January report due to a long anticipated increase in wheat exports of 50 million bu as well as a 10 million bu increase in feed usage. That more than offset the 10 million bu increase in wheat imports coming from Canada. Wheat markets had rallied over the last week going into this report as wheat sales have remained strong and concerns continue about the condition of the winter wheat crop...
Wheat markets continue to wander in their winter doldrums. The futures are trying to find a bottom but the commodity funds continue to press the short side with speculative funds now holding close to a 500 million bu net short. On the bear side, the last USDA Crop Report showed 60 million bu decrease in wheat feed use compared to the December report. This more than made up for the 25 million bu increase in wheat exports resulting in a 33 million bu increase in U.S. ending stocks for wheat. World wheat carryovers were also...
On Tuesday the USDA released its December Crop Production Report. On the wheat side, the only overall adjustment made to the U.S. table from last month was an increase in wheat exports of 10 million bu. That raised U.S. wheat carryovers to 575 million bu for next year. The market had been looking for a drop in U.S. wheat carryovers due to an increase in wheat exports, but it did not get it in this report. As for the world supply/demand situation, the report increased world wheat production by 5 million metric tons due to a 4...
White wheat cash markets firmed last week despite slightly lower futures and in the face of the Australian and Argentine wheat harvests. Export sales picked up with a total of 4.9 million bu in white wheat sales for the week ending November 15. Total wheat sales added up to 22.7 million bu, a sizeable increase from the previous four-week average. The world price for wheat remains firm, and there was even 2 million bu of soft red sold to Egypt last week. Wheat futures, on the other hand, remain in a narrow trading range at...
By PEARSON BURKE During the government shutdown the USDA did not release any reports including the October Crop Production Report. Last Friday the USDA did release its November Crop Production Report. Traders were anticipating a reduction in U.S. wheat carryovers from the September report due to an increase in export sales and a slight reduction in production. Traders were also looking for corn production to top 14 billion bu due to higher yields and as a result, for corn carryovers next fall to come in at over 2 billion bu....
Over the last couple of weeks, wheat markets continued their upward trend, supported by strong export sales, particularly to China and Brazil. News of more crop concerns in Argentina, as another cold snap and another reduction in production estimates, sent wheat futures to new four-month highs last Friday. Argentine wheat production is now estimated as low as 8.8 million metric tons versus earlier estimates of 13 million metric tons. This is the main reason why Brazil has been such a large buyer of U.S. wheat this year....
This Monday, the USDA released its Stocks and Acreage Report. The biggest numbers in the report were the corn stocks, as of September 1, which totaled 824 million bu. That was higher than any of the pre-report estimates. The other number in the report was wheat stocks, which came in at 1.855 million bu, which was on the low end of the estimates and the lowest September 1 wheat-stocks number since 2007. Based on these numbers it looks like USDA has acknowledged that there was more wheat feeding during the summer than had been...
Last Thursday the USDA released its September Crop Report. With the hot, dry weather the cornbelt has experienced over the last month and the 2-3% decline each week in the condition of the corn crop, the question was how much would corn yields and production drop in this report. The answer was none, in fact USDA increased yields by one bushel per acre and increased production back up to 13.84 billion bushels. While ending stocks for this year were decreased to 661 million bu, the higher production numbers pushed ending...
Over the last month the price of wheat has been in a fairly narrow trading range. That relative calm has belied some of the powerful forces that have been influencing the grain markets both globally and locally. The futures markets are the backbone of the grain markets, for better or worse. And over the last month the speculative funds have had a major influence on the market by acquiring a record short position in wheat and a very sizeable short position in corn, largely based on the anticipation of a record corn harvest. Up...
The grain markets have been in a downtrend for the last couple of months, pressured by very favorable weather in the central U.S. and continued selling by speculative funds. Traders were surprised that in the July crop report USDA increased acres and production despite the flooding and planting delays that the cornbelt experienced for most of the spring. Heading into Monday’s report, most traders were looking for a 14 billion bu corn crop and a 2 billion bu carryover for next year. Once again the market got caught leaning the...
This past week wheat markets experienced a bit of a rally from their recent lows. Winter wheat harvest moved past the halfway mark and now stands at about 70% complete nationwide. More times than not that signals a rally in the wheat market. This year is no exception; the question is how high. Fundamentally, support also came from good recent export sales, particularly from China. I do not think it was a coincidence that China came when they did. They also know when the seasonal lows of a market typically occur. They might...
The USDA’s Grain Stocks and Planting Intentions Report, which came out last Friday, was quite a shock to the market. After all the excessive rains the Midwest and corn belt experienced this spring, causing flooding and planting delays, the question was how many acres were lost. Well the answer, according to the report, was none. In fact acres were gained. Corn acres came in at 97.38 million vs. 97.28 million in the March 1st Stocks report. That represents the highest corn acreage since 1936. The market had been expecting a 2-...
