Wheat Rallies on Report Day, Closes Off the Highs

The KC wheat futures market led the rally, spiking to 50+ cent gains initially after the report. At the close front month HRW futures were 23 1/2 to 35 1/2 cents higher. May expired at $8.91 3/4, a 14 cent premium to the July. Chicago wheat closed with 8 cent gains after seeing +20c gains out of the report. May SRW expired at $6.24 1/2, a 10 cent discount to the new front month. July SRW was still down by 25 1/4 cents for the week’s move. Spring wheat futures were 7 to 9 cents in the black at the close. That left July at a 10c gain for the week and a 14 cent premium to the now expired May contract. The old crop cash price was a nickel weaker to $8.85, while the new crop price was listed at $8. 

CFTC’s weekly CoT report showed CBT wheat spec traders reduced their net short by 9.5k contracts, though they were still 116,906 contracts net short on 5/9. Managed money firms were back to net long after short covering through the week. In MGE wheat, the group was 8,318 contracts net short. 

The May WASDE report showed no changes for the old crop domestic balance sheet. For new crop, production was set at 1.659 bbu. By class, NASS had just 514 mbu for HRW compared to the expected range of 492 to 680, SRW was set at 405 mbu with 210 mbu for white winter. The demand side of the equation has wheat feed and residual growing 15 mbu yr/yr while exports shrink by 50 to 725. New crop stocks are figured at 42 mbu tighter at 556 million bushels. 

The global wheat carryout was 1.23 MMT looser for old crop, and about 1 MMT above the trade average guess. New crop’s initial outlook was 789.8 MMT of output, up about 1 MMT yr/yr. Ukrainian output is projected to drop from 21 MMT to 16.5 MMT in 23/24. Global ending stocks were figured at 264.3 MMT, a 2 MMT tighter yr/yr comparison but looser than the average trade guess of 260 MMT. 

Jul 23 CBOT Wheat  closed at $6.35, up 7 3/4 cents,

Sep 23 CBOT Wheat  closed at $6.47 1/2, up 8 1/2 cents,

Cash SRW Wheat  was $5.74 1/1, up 7 7/8 cents,

Jul 23 KCBT Wheat  closed at $8.77, up 35 1/2 cents,

Cash HRW Wheat  was $8.46 3/4, up 35 5/8 cents,

Jul 23 MGEX Wheat  closed at $8.46, up 9 1/4 cents,