Commentary
This past Monday 4/1, USDA released its first crop condition rating for the winter wheat crop. The good to excellent category came in at an impressive rating of 56 percent. This was up six percentage points from the end of November and the highest initial spring rating since 2019. The portion of crop rated poor/very poor stood at 11%, down four points from last Fall. For now, we do not have a weather premium for funds to chase and short over. While that could change at any moment, the last two days was merely short covering in my view with buying highlighted in the overnight trade for the most part.
For the week, the wheat complex finished with small changes vs last week despite the rallies seen the past few sessions. May Chicago wheat saw a 34.25 cent trading range posting gains of 7 cents and did keep the uptrend intact with holding last week’s low of $5.38 ¼, while taking out the highs. One of the reasons were rumors that Russia is reportedly curbing its grain exports had in my opinion speculative money chasing futures higher. The fact remains in my view that the glutted global wheat situation won’t tighten soon. This seems especially true in the wake of aforementioned greatly improved winter wheat crop ratings. Still, a corn/soybean rally could pull wheat higher or a major shift in geopolitical risk that prods funds covering their sizable, short among three wheat classes in my opinion. Support for next week is just underneath today’s settlement at 5.66. Consecutive closes under and the market could retest recent lows at 5.38. Under this level next support is 5.25. If this doesn’t hold, the gap at 5.08 is next. Resistance is the 21-week moving average at 5.85, A close above and its 5.91. A close over here and the next resistance is 5.97. A close over here and wheat could run to 6.19/22.
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