Grain Spreads: Funds Flip in Wheat

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Commentary

Wheat spent most of the session showing a mixed response to the worse-than-expected national G/E ratings for the US Winter Wheat crop. Analysts estimated that winter wheat conditions would come in at 42% good to excellent, with USDA reporting an actual value of 35% for the category. This is down 13% from year-ago levels due to the ongoing drought impacting the Plains, and the lowest initial spring rating of the crop since 2022. Colorado and Montana noted the sharpest declines in ratings but was partially offset by increases in Idaho and Washington. Despite the HRW areas being mostly responsible for the condition miss, hard red winter wheat futures spent most of the session on the negative side of unchanged. TX, OK, and CO, not only underperformed their 5-year average ratings but also the lower expectations already in place for the first condition report oat dormancy. COT report from Friday showing as of Tuesday the funds had flipped to long across the complex with Minneapolis setting a new record on the long side with the net position +20,487 contracts. Chicago also moved to a net long with funds buying +11k and were long 8,641 as of 3/31/26. Kansas City added +12k to long and were at +21,517 long biggest of the year. Spring Wheat plantings have just begun, with 2% progress logged by NASS, just behind the 3% average rate by this date. For Thursdays WASDE report, the average trade guess for old crop wheat ending stocks comes in at 923 million bushels. The range of guesstimates is 890 on the low end and 959 on the high. No trade recs as of this post with geopolitics and those uncertainties at the forefront.  

Trade Ideas

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Risk/Reward

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Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

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