Wheats Gapped Higher into October Trade

The new month of trading begun with a dime gap higher out of the weekend – the gap is still open from $9.26 to $9.321 1/2 (Dec SRW). Wheat futures rallied on the USDA reports, but faded into the close on profit taking. December Chicago SRW futures were up as much as 49 1/2 cents, but ultimately closed 25 1/4 cents higher. The other front months went home 10 1/2 to 25 1/4 cents higher on the day. KC HRW futures were 4 1/4 to 24 3/4 cents in the black on Friday. Spring wheat futures closed up by 8 to 16 cents. 

The weekly Commitment of Traders report from CFTC showed Chicago wheat spec traders were 1,306 contracts less net short through the week that ended 9/27. That came via 13.5k fewer contracts in play as the short covering offset the long liquidation. Managed money funds were closing shorts in KC wheat as well, for a 4,846 contract stronger net long of 23,905 contracts on 9/27. The report also showed short covering from MGE wheat specs, causing a 1,867 contract stronger net long of 4,236. 

NASS data showed wheat stocks were 1.776 bbu for Sep 1. That was within the range of estimates but under the average expected. Last season saw 1.774 bbu of wheat stocks on 9/1. Q1 usage was implied at 543 mbu off the 1.650 bbu production and carry-in. Last season saw an implied Q1 use of 717.5 mbu. Specific class production saw 1.104 bbu of winter wheat with 531 mbu of HRW and 337 mbu of SRW. Other Spring wheat was 482 mbu with 64 mbu of durum. White wheat was 272 mbu.

Saskatchewan had grain harvest 81% complete through 9/26. Spring wheat was specifically 83% complete and durum was 96% out. BAGE reported their initial 22/23 wheat harvest as 17.5 MMT for Argentina, down by 22% yr/yr. 

Dec 22 CBOT Wheat  closed at $9.21 1/2, up 25 1/4 cents, currently up 9 1/4 cents

Mar 23 CBOT Wheat  closed at $9.32, up 24 cents, currently up 8 1/2 cents

Cash SRW Wheat  was $8.54 7/8, up 27 5/8 cents,

Dec 22 KCBT Wheat  closed at $9.91 1/2, up 24 3/4 cents, currently up 11 cents

Cash HRW Wheat  was $9.47 1/8, up 22 5/8 cents,

Dec 22 MGEX Wheat  closed at $9.82, up 16 cents, currently up 8 1/2 cents