Archive for the ‘Wheat Futures’ Category

Wheat futures support fell out from beneath on the outlook global wheat production will be the most abundant in history for the fiscal year beginning next month.  As of yesterday’s close, wheat futures are down 10% for the year, but overall trending sideways.

Last week the USDA stated in a report global wheat harvested will amount to just over 701M metric tons – an all out record.  They also predicted the US will be the biggest wheat exporter next year.
            
“When you look at some of the production estimates coming out of the major growing regions it’s hard to come to any other conclusion than we will likely see a large wheat crop this year,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current wheat futures situation.

Wheat futures technical trend has been up since late March, but clearly trending sideways since.  I am looking for wheat futures trend to technically resume down, and then get onboard the “short” train.

Oklahoma seems to bearing the brunt of the extended winter weather.  Freezing temperatures expected tonight threaten that state’s wheat production which is already expected to be 45% less (85.5M bushels) than last year’s totals of nearly 155M bushels.

Wheat crops this year are taking a double-whammy in damage first by drought not seen since the 1930′s, and now freezing temperatures since the plants have sprouted from winter dormancy recently.  Hard-red winter varieties of wheat used to make “bread” is mostly grown in Oklahoma.
            
“The crop tours are showing signs of a damaged (wheat) crop.  The short term direction is up.  If weather gets worse, (wheat futures) may go a lot higher,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current wheat futures situation.

Normally this time of year wheat futures are in down-trends into their harvest lows in early-mid summer.  This year there is a wheat futures counter-trend “up” in progress, but I’m skeptical of it.  I need more time for a clearer picture to unfold.

Freezing temperatures have hit the southern Great Plains where winter-wheat crops are grown.  The risk of damage is certainly there with night temperatures expected to be as low as 14 degrees after freezing temperatures last night.

The cold temp’s are as west as the wheat growing region in Colorado stretching through Kansas, and as north to south from the Dakota’s to Texas.  The important thing to consider is that the wheat have not started heading – the stage when the grain emerges from the stem – and this should limit any damage.            

“The wheat (futures) market is getting support from weather.  In my opinion, until conditions clear up and the market can decide the production losses,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current wheat futures situation.  Moreno adds, “Look for buyers in wheat (futures).”

The trend for wheat futures is at a crossroads.  Wheat futures made new lows early this month from an overall downtrend, and I am still favoring the downside (based on my own work).

The USDA released its monthly crop production report and stated global wheat inventories will be bigger than forecasted last month.  Wheat futures fell as much as .19c following the report.

Wheat analysts expected only a nominal upward revision to world stockpile amounts, but as it turns out, the revision is more than 4M metric tons added to last months 178.23M forecast.  Wheat futures are down in price 25% from last years high as farmers increase their output at a time when global wheat demand is said to be slowing.            

“Global wheat supplies have increased beyond expectations, which continues to put pressure on (wheat) prices.  The extent of damage to the wheat crop in the United States due to weather is not fully known, and this may help support (wheat futures) prices long-term,” said Kevin Craney, a senior commodities broker at RJO Futures in Chicago, regarding the current wheat futures situation.

Wheat futures have been trading right near their 18-day moving average for almost a month now.  We are looking for short wheat futures signals now…

Australia’s largest grain handler predicts wheat shipments from their country is expected to increase by 13% for the 2013-14 marketing season.  Australia is the worlds third-largest wheat exporter, and the higher profits as of recent has encouraged more farmers to plant more wheat.

Wheat sales are expected to increase to as much as 18M metric tons (beginning fiscal year in November), compared to 16M m-tons exported this current year.  Wheat production, however, is slated to expand to 24M tons from 21.5M tons currently.

“Early indicators are pointing to the second largest wheat crop on record.  Increased planting in Europe in response to higher 2012 (wheat futures) prices and a recent favorable outlook of the US recovering from a drought are all signs that point to a decrease in wheat prices,” said Jim Allen, licensed futures & Forex broker at Foremost Trading in Geneva IL, regarding the current wheat futures situation.  Allen added, “I am looking for a bearish (wheat futures) trend for 2013.”

Wheat futures trend is clearly down, with no clear bottom yet in sight.  I was stopped out of both wheat futures positions (entered today), but am looking to get back in the short side in the near future.

There is now an outlook world wheat supplies will be ample with Australia reporting wheat crop expansion and India said to be considering increasing exports of their wheat supply.  Wheat futures are extending their losses on these revelations.

The Australian government’s forecaster claimed yesterday global wheat production may climb as high as 5% for the 2013-14 season, and harvesting up to a projected 13%.  The world’s second largest wheat grower – India – says they are considering approving more exports from their “reserves” as their Agricultural Minister forecasts a near record wheat harvest.

“The wheat harvest figures in Australia are expected to come in 13 percent over last year,” said Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, regarding the current wheat futures situation. Levy added, “In the US winter storms have added moisture to the soil, alleviating concerns of persistent drought conditions.”

The trend, and seasonal tendency, for wheat futures continues to be down.  We are short CBT Wheat futures, but not Kansas City Wheat futures due to the market skipping over our sell-stop limit.  It’s disheartening at times, but a wheat futures market that needs curbs on fills.  We’ll try to get back in on a pull-back tomorrow.

Wheat futures has extended its losses this week on ample snowfall in the Mid-West.  There was initial concern on continued drought-like conditions lingering from previous years and damaging wheat crops.

The National Weather Service says the storm that started yesterday is expected to drop 20″ of snow over the wheat fields around Dodge City, Kansas.  In the north-central part of Kansas, they have already nine inches on the ground so hopefully the parts of that state that have had exceptional drought conditions will be improved.

Kevin Riordan, director of commodities research at Capital Trading Group in Chicago, had this to say regarding the current wheat futures situation, “Wheat farmers and cattle ranchers are cheering the snow in hopes it will ease the drought conditions in the Midwest.  It’s not as good as two days of rain but the sheer volume of the snow will bring some moisture, which will be beneficial to the wheat crop.”

Wheat futures continue their down-trend with new lows today not seen since last June.  We are short both wheat futures markets with no bottom in sight.

The USDA is backtracking it’s wheat supply estimates it provided last month with the outlook that it is higher than what was previously estimated.  Wheat futures have sunk to a three week low on this speculation of higher stockpiles.

A Bloomberg News survey of 29 analysts believes wheat inventories are 1M bushels more than the USDA estimated last month.  On Friday, the USDA will update its wheat supply & demand forecasts.

“Wheat (futures) continues its broader trend down. Weather and fundamental supply will be key drivers for the wheat market as we move forward,” said Kevin Craney, a senior commodities broker for RJO Futures in Chicago, regarding the current wheat futures situation.

Wheat futures uptrend appears to be at a crossroads.  I am still bullish wheat futures, but if last month’s low is breached then I would have to sway toward the bearish seasonal tendency.

Wheat futures are up for a second trading session on the outlook of precipitation in the wheat growing heartland won’t provide the needed moisture in the ongoing drought.  Wheat futures are up .02 cents at quarter past noon Chicago time.

The forecast for Kansas & Oklahoma – the states which produce, and export, the most amount of winter wheat in the US and world (respectively) – are for only small amounts of rain.  Farmers have reported “as much as 40% of wheat plants have failed to emerge after seeding” which is said to threaten 25% of the future harvest because of the extremely dry weather.

“Many farmers in the western and central section’s of Kansas and Oklahoma are concerned with crop conditions since many weather forecasters are reducing the amount of expected moisture in those regions,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current wheat futures situation.

Wheat futures have been trending decisively down with no bottom in sight.  Until I see “long-range” days to the upside, I still must continue to trade wheat futures to the downside.

With the outlook for near-term rain and snow in US area of hard-red winter wheat, wheat futures closed down today (after initially rallying). The consensus is with the precipitation, the prospects are very good for wheat crops dormant during winter months.

There is a forecast for snow for some areas of the Southern Plains, and most of the Midwest areas of Iowa, Missouri, and Nebraska. It had been the really dry weather that help propel wheat futures to nearly a 25% gain year-to-date.

Wheat futures have taken a decisive turn to an all out downtrend recently, and we are currently short CBT March Wheat futures. I’m also looking to get short Kansas City Wheat futures tomorrow.