Commentary
In my view today’s report from USDA was a nonevent for wheat. US 2024/25 all wheat production came in at 1.875 billion bushels versus an average expectation of 1.884 billion and a range of 1.858 to 1.925 billion. World ending stocks for 2024/25 came in at 252.3 million tonnes versus 251.2 million expected (range 247.5-255.1 million) and down from 253.6 in May. The US govt cut Russia’s crop 5 million metric tons (mmt), EU’s 1.5 mmt, Ukraine’s 1.5 mmt, and raised Argentina’s .5 mmt. Net out the rest of the changes, and the world-ending stocks only fell by 1.4 mmt. Therefore, in my view the report did not show any major fundamental changes that would result in a major market action and prices remain lower on the day. Trader focus will now turn back to US harvest reports and Black Sea weather which are the 2 most important market drivers at this time in my opinion. While the USDA acknowledged the frost and drought issues of Ukraine and Russia but did not regard the damage as severe as private crop scouts have. Monday saw a huge reversal in the wheat market. Today it was negated as wheat gave most of the rally back. Technically July Chicago needs to hold 6.06/08. Should we fail there the market could quickly retest 5.75. A close above yesterday’s high at 6.31 is needed to turn this higher and confirm Tuesday’s reversal in my opinion.
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