Upcoming harvest seen pressuring wheat prices, analyst says
The technical action for the winter wheat markets is bearish, and it seems to be attracting increased selling.
However, with poor crop conditions for the spring wheat and mostly dry weather in the forecast for the next two weeks, Minneapolis wheat is probing for a short-term low.
The short-term wheat supply looks a bit burdensome, with the winter wheat harvest expected to pick up steam in the next few weeks. Keep in mind that ending stocks estimated for the world’s major exporters for the 2021/22 season have jumped to 40.52 million tonnes, which is up from 34.37 million last year and 30.6 million two years ago. This is bearish.
July Chicago Wheat closed sharply lower, yesterday, but managed to bounce well off its lows from earlier in the session where the market had fallen to its lowest level since May 27.
Weakness in the other grains, plus news that Egypt canceled their tender to buy wheat on the world market, helped pressure prices. High shipping costs seem to be the issue. Another source of pressure was expectations for the winter harvest to accelerate. With the dry forecast for the Dakotas, December Minneapolis wheat closed just slightly lower on the session and held well above Monday’s low.
Russian wheat exports rose 8% so far this season and reached 37.3 million tonnes as of June 10. According to a Reuter’s survey, wheat exports from Russia, Ukraine, and Kazakhstan are expected to jump 5% to 66 million tonnes for the 2021/22 season.
December Minneapolis Wheat support is $7.42½, with $7.78¼ and $7.89½ as resistance. The close under $6.64 for July Chicago wheat is a bearish technical development and leaves $6.39½ and then $6.14¾ as next support. Resistance is at $6.70. The close under $6.13½ for July KC Wheat is a bearish technical development and leaves $5.88 and then $5.62½ as next support. Resistance is at $6.22.
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