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Commentary
Wheat prices led the grain complex lower on weekend rains in my opinion. An active weather pattern will be seen across much of the central U.S., with all major crop areas likely to be impacted during the next 10 days. The Ohio, Tennessee and lower Mississippi river basins will continue to deal with saturated fields and periodic flooding. Dry western HRW areas of the Plains are forecast to receive needed rains from midweek into next week. Managed Money traders remain heavily short, but the technical picture has not improved enough to result in any significant short covering. The Commitments of Traders report for the week ending April 15th showed Wheat Managed Money traders are net short 96,439 contracts after net buying 5,693 contracts. KC Wheat positioning in the Commitments of Traders for the week ending April 15th showed Managed Money traders are net short 47,372 contracts after net buying 2,462 contracts. Crop Progress came out at 3pm Central today. Hard red winter (KC) showed a small out decline in the winter wheat ratings at 45% good to excellent which is down 2 points on the week. Number one KC wheat producer Kansas was down 2 points on the week, with Oklahoma down 5 points. Soft red wheat (Chicago) steady to better for most states w the exception of Ill put at 55% G/E down from 66% last week. Spring wheat planting was put at 17% up 10% from last week and running ahead of the 12% five-year average. South Dakota led the way at 50% vs 27% (5-year average), North Dakota at 10% vs 5% (five-year average), MT 16% vs 9% five-year average. In my opinion the warm weather has allowed for planting to get done sooner causing no delays. Watch North Dakota’s progress, they are the bellwether here as they represent approximately 50% of the Spring wheat crop. Chicago wheat chart below. Wheat support is 551/553. A close under and we could fall all the way back to 5.24 and then 5.17, near term low. Wheat needs to hold here in my view. Resistance is 569, (50 week moving average) and 570 trendline. A close over and its 587 and 594. Trade the charts. Wheat may have another run here before hard red harvest begins at the end of May.
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Sean Lusk
Vice President Commercial Hedging Division
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