December Chicago wheat was trading 7 1/4 cents lower near 7:15 am CST. Kansas City and Minneapolis wheat are trading lower as well. The November Matif Milling wheat contract traded 0.25 Euros lower overnight. Outside market forces are quite negative overnight led by a sharp break in the stock market.
US wheat futures have turned lower on negative outside markets and after traders were once again disappointed by the uncompetitive price structure of US wheat in the Iraq wheat tender. The market is still awaiting results from the 50,000 tonne Hard Wheat tender but traders noted that US offers were well above other world origins and no business was expected. Traders noted that the US was between $20-30 per tonne too high, on a delivered basis, vs. other origins. Surprisingly, a couple Russian cargos were offered along with Romanian and Canadian wheat. US exporters were able to sell 104,000 tonnes of milling wheat to Taiwan overnight for November through December shipment. Yesterday's volume was once again sluggish in Chicago wheat with only 52,101 contracts trading and open interest increased by 3,756 contracts.
The weekly Winter Wheat Planting report showed 81% of planting was complete compared to 71% last week and 79% last year. The above average pace of planting is not a surprise given how quickly soybeans are being harvested as farmers double crop. The 10 year average for this time of year is 82%. The highest percent complete was 89% in 1987 while the lowest was 72% in 2009. Much like corn harvest, the progress in the west is exceeding that of the east and that is attributed to a drier weather forecast that has provided very few disruptions to work in the fields. Missouri, Arkansas, and North Carolina remain the worst performing states while planting in Kansas, Nebraska, and Colorado should be wrapped up by next week.
Emergence is becoming an issue in the west and only 49% of the entire winter wheat crop has emerged as of October 21st against 36% last week and vs. 51% for the same period last year. The 5 year average for this time of year is 56%. The most notable issues remain in the western plans but specifically the northwestern growing regions where drought conditions continue to be severe in many cases. Emergence in Colorado is 16% behind the 5 year average, Montana 31%, Nebraska 29%, and South Dakota a staggering 67%. The data suggests that germination has been effected greatly from the lack of moisture and South Dakota and Nebraska top soil conditions remain over 90% short to very short as of October 14th. A dry pattern is expected to persist in the southern and western plains this week while lingering showers are moving across the central Midwest and eastern Corn Belt today through the end of the week. Longer term models suggest a better chance for rainfall for the Hard Red Winter wheat areas after October 31st. Rainfall is desperately needed for all of the western plains but primarily for the PNW, South Dakota, and Nebraska.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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