Wheat Market Giving Back AM Gains

The wheat market has slid into the red after digesting the Black Sea event through Tuesday. CBT SRW futures were up by as much as +20 cents in the front months, but are currently fractionally to 2 cents in the red. KC Wheat futures are down by 9 to 10 cents after seeing earlier gains of as much as 25. Nearby MGE futures are trading with 9 to 13 cent losses. 

Overnight news declared a dam in Kherson Ukraine had been breached via targeted Russian bombing. Initial concerns about cropland floods and port export disruptions had the market higher in the AM portion of Tuesday. The region of Kherson accounts for ~6% of Ukraine’s annual wheat production (#6 ranked oblast (/state)). 

The weekly Crop Progress data showed winter wheat harvest reached a reportable amount, at 4% nationally. Nationally, 18% has not yet headed compared to 19% remaining on average. Winter wheat condition ratings were higher to 293 on the Brugler500. NASS data showed 7% of spring wheat remains to be planted as of 6/4 which matches the average. Emergence was shown at 76%, 2 ppts ahead of average. The initial spring wheat ratings were 64% good/ex for a Brugler500 conversion of 368. That compares to last year’s initial score of 348. 

Analysts are looking for 5.5 mbu looser wheat carryout ahead of the monthly USDA report. The full range of estimates is from 592 mbu to 643 mbu from 598 in the May report. New crop wheat stocks average 566 mbu going in, which would be 10.2 mbu looser if realized. Traders are looking to see a 6.5 mbu increase for wheat output on average – with HRW expected at 518 mbu and SRW at 414.5.

Jul 23 CBOT Wheat  is at $6.23 3/4, down 1/4 cent,

Sep 23 CBOT Wheat  is at $6.36 1/2, up 1/4 cent,

Cash SRW Wheat  is at $5.73 1/4, up 0 cent,

Jul 23 KCBT Wheat  is at $8.11 1/4, down 11 cents,

Cash HRW Wheat  is at $7.72 3/8, down 10 1/2 cents,

Jul 23 MGEX Wheat  is at $8.07 3/4, down 12 1/2 cents,