December Chicago wheat is trading 3 1/2 cents lower near 7:00 am CST. Kansas City and Minneapolis wheat are trading lower as well. There were 37 September Chicago wheat deliveries overnight bringing the month-to-date total to 620 contracts. The November Matif Milling wheat contract is trading 1 Euro lower. The wheat market held steady for most of the evening however grains fell under significant pressure once European markets opened. Investor moods have soured ahead of the ECB meeting on Thursday where many feel a new, long term bond purchasing program will be unveiled. The US Dollar is trading higher today which is adding pressure to the broad-based commodity market.
December Chicago wheat failed to hold on to early gains yesterday after buying interest became exhausted and profit taking took over. Chicago wheat lost to corn which perhaps had more to do with traders repositioning the corn vs. wheat spreads after wheat gained on corn last week due to speculation that Russia might restrict exports. Traders have since narrowed this spread after Russia once again sold Egypt wheat last weekend and announced they had no plans to implement restrictions.
Winter wheat planting is underway in the western plains and will begin to pick up in the east following soybean harvest. Conditions continue to trend drier the normal in the west but rainfall is expected to pick up over the next two weeks. Kansas, Nebraska, and Oklahoma are trending drier than normal with Kansas topsoil moisture levels at 73% short/very short, Nebraska 94% short/very short, and Oklahoma is 92% short/very short. Given the drought conditions for much of the western plains the last two years, it's critical that these areas receive 1 or 2 very large soakings this month and into October. Spring wheat harvest is coming to a close in the northern plains with the weekly Spring Wheat Harvest report showing 95% complete compared to 89% last week and 63% last year. The 10 year average for this time of year is 76%. The highest percent complete was 96%.
Russian and Ukrainian grain yields continue to trend below year ago levels. Russia's Agriculture of Ministry reported that Russian grain yields have fallen 27% from last year to 1.89 tonnes per hectare with 65% of the harvest complete as of September 3rd. In addition, Ukraine is reporting that 25.8 million tonnes of grain has been harvested which is 67% of the total harvested areas. Reported yields are 2.57 tonnes per hectare vs. 3.03 the year prior. The lower then average yields and rapid pace of export sales by Black Sea shippers suggests an exportable surplus that is shrinking and sales could slow in the near future.
*Disclaimer: The information in the Market Commentaries was obtained from sources believed to be reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts.
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