Archived Daily Updates

Market Bullets® Wednesday, July 30, 2025: Pre-Dawn

     Volume of trade in Chicago, the most liquid of the major exchange traded wheat contracts, has been in the lower 1/3 of the year-to-date range, suggesting that the market is without conviction. Higher volume is usually a sign of urgency or at least enthusiasm. This market seems exhausted, having worked through the solid rock of a 7-month sideways foundation and now facing a decent crop coming into the system from nearly all the major wheat-producing regions of the northern hemisphere, with more to come. There is no problem for the buyers in this environment, they feel little risk when attempting to bully the offers lower by passing on any given tender. There is always another week. Complacency in buyers can be seen as a harbinger of a true bottom, but a slow one in this case.

     If we can force the chart patterns to speak, with what appears to be a 3-top that has been forming since May, 2025. The conundrum for this pattern is that it is a top indicator that is appearing very near long-term lows. If the thing is realized, it calculates a price target near a nominal $4.94, around 38 cents below current trade. Ouch! These things don’t always reach full flower, but they should not be ignored. There will be a more detailed examination of the setup in the next couple of days on this station. Meanwhile it is not a “friendly”.

     In a market that has such a deficit of positive influences to study, this may trigger dismay. Fear not! There are marketing strategies that can blunt the anxiety and the risk. More tomorrow.

     The U.S. Dollar Index has been crawling upward from recent lows. Month-to-date the Index is up 2.26% (this in the face of an 11% March-June decline). Part of the reason for a hint of bullishness has come from that decline.

     The major part of winter wheat harvest in the U.S. is completed, with about 20% to go (including most of the PNW). The spring wheat and Canadian crop will come next. The market sees no serious threats of crop-shrink.

     In the wee hours of Wedesday, Paris 11% milling wheat is flat inside of a narrow range. Minneapolis HRS is up 1-2 cents in the nearby contracts, while later delivery periods lag by 1-2 cents (the carry may be tightening, a sign of a market that is bidding firm for nearby wheat, a price positive)

     Even with the dull and boring action of recent weeks, this is not a good time to ignore the market. Stay tuned for further developments!

Market Bullets® Tuesday, July 29, 2025: Pre-Dawn

Clamping down on Putin means hitting his oil-buying friends (China, India). The deadline is now early August. The economic wear on Putin has to be getting heavy. He gives no sign that any of this means anything to him. Based on Putin’s past patterns, it is going to be interesting to see how this pressure plays out. There is a strong intuition that he is unlikely to bend his objective of total capture of Ukraine. Somehow I can’t envision Vladimir calling Don and saying, “Hey Don, I think you may be right. I’ll just call all of the families in Russia that have lost people and tell ‘em, “Hey I’m going to quit trying to take Ukraine…sorry about your losses!”  It’s going to be educational! For wheat it’s just more of the same; high global anxiety and cheap Russian wheat.

    Winter wheat harvest in the U.S. is 80% in the bin as of July 27th versus 81% on average by now, according to USDA’s Weekly Crop Progress Report. The northern hemisphere makes about 90% of the worlds wheat versus 10% from the south. The harvest has been relatively uneventful and found that there was a crop out there. Test cutting in U.S. spring wheat is active, with the 6-state completed figure at barely 1%. Washington is 11% done and South Dakota shows 10%, but other big spring wheat states are still waiting for the sucker heads and north-facing coves to dry out. The Red River Valley is looking for a big spring wheat yield average.

     Although the last week’s U.S. wheat exports were reported slightly below trade expectations, cumulative totals in export inspections (loadings) for the 2025/26 marketing year that began on June 1 are still slightly above last year’s pace so far, at 121.6 million bushels.

     Tuesday early trade shows Chicago wheat trading weak, down 7 cents at 4:50 AM, KC Hard Red Winter following Chicago. Minneapolis was only down about 1-2 cents and Paris 11% Milling Wheat was indicating down the equivalent of 4 cents. Its harvest behavior.

     Argentine President Javier Milei announced export tax cuts on meat, grains, and oilseeds (although passing over wheat, which will apparenly remain at 9.5% until next March of 2026). Argentina had been absent from their - decades ago – leadership position in grain exports due to previous administration’s socialist policies, but Milei is making changes. Even with this encouraging news, Argentine wheat planting is expected to decline due to low global prices. In the longer run, it’s healthy for the market.

The wheat complex trend is weak. This is a good time to review the marketing plan and get serious about deliberate wheat marketing decisions and not just checkbook-style sales. Just sayin’…

Stay tuned, something will happen.

Market Bullets® Monday, July 28, 2025: Pre-Dawn

All of the four major wheat exchange leading contracts are below their respective Box-o-Rox “Execute Planned Incremental Sales” indicator lines. This is not a speculative signal, but the message is that there is no uptrend line in progress. The price has been stumbling back and forth across this line like a tired lineman running a rope drill at the end of practice, but the coach keeps saying, “You’re not tired, you just think you’re tired!”

Using Chicago as a bellwether, the support zone is about 10-30 cents below this morning’s early trade. The bottom of that zone at $5.05 has held for at least 8 moons.

There is a complacent tone and the coffee-talk is more about Trump’s Deals or the Epstein Files than any market mandating data.

The chart trend is about a flat as it gets, so holding onto price-exposed wheat in storage is a slow bleed. A price rally from this level remains a reasonable expectation but there is downside risk and no time limit on the dull trade. If you must sell here there is no mandate to wait. Buy it back later with paper if you can find reason to.

*The best visual perspective on trend is from the monthly wheat chart. Take a look if you dare!

Copper is holding near it’s all-time highs.

Diesel is trading slowly in a flabby pattern, at the low side of its recent upward channel.

The U.S. Dollar Index is marginally positive, up 1.68% month-to-date, following a long string of negative months.

The Russian Ruble is slightly weakening versus its benchmark currency, as Vladimir Putin appears to be all-in on his invasion of Ukraine. The sanctions are raising the economic pressure on him, but it is a slow process.

Natural Gas (60%-70% of the cost of making anhydrous ammonia fertilizer) is working on making new 3-month lows.

  Wheat remains trackable. Let’s track it!

Market Bullets® Friday, July 25, 2025: Pre-Dawn

If there is a headline grabber this week, it was the sweet song of good export sales of wheat. Wednesday’s Export Sales came out and blew past expectations! When was the last time you remember a positive note from the exporters. We're talking a marketing year high of 712,179 metric tonnes in sales for the week ending July 17th, a much-needed shot in the arm that made marketer’s ears go up. (so there is another day where the range lows remain intact). "Oh, so that's where the demand was hiding!" 

The sales report was a breath of fresh air for U.S. wheat, although the Chicago wheat futures front month (September delivery) gave only a parsimonious plus-1½. KC Hard Red Winter (HRW) behaved a bit better, with plus-4-cent session. U.S. wheat may be  finding its place in the global market, even with fierce competition. USDA even raised its U.S. wheat export forecast in the July WASDE for 2025/26 to 850 million bushels, the highest since 2020/21 (The sour note on report day was due to an increase in production estimates based on improving expected yield.

The short-term trend remains sideways to slightly choppy. The market has been too complacent to decisively break out of it’s iron-sided, 7-month trading range. We're looking for sustained closes above previous high points that function in the market hive mind as prices that discovered enough willing sellers to turn the move back. If those sellers are still there, it may take a couple more attempts to overcome them with either hungry or frightened buyers. For Chicago SRW, keep an eye on the $5.30-$5.40/bushel area as a crucial support (discovered strong buying) zone. On the upside, the $5.60-$5.70/bushel range is a significant hurdle. A confirmed trade volume above $5.70 would be a friendly signal that could finally motivate the funds into significant short-covering (Buying back previously sold contracts). The “Box-o-Rox” moving averages are about as flat as such an indicator can get, as the daily price wiggles jump back and forth as it it were a jump-rope, a frustrating pattern for traders, but a sign of a reliable measuring range from which to launch the next move (up or down) for marketers.

Prices consistently above the BoR or other psychologically charged lines, like 50-day or 200-day averages causes buyers to gain confidence. Such things are “the stuff dreams are made of.”

 The bulls may be given a chance to prove themselves soon, as harvest pressure begins to wind down for winter wheat.  Meanwhile, The Wheat Quality Council's 2025 Spring Wheat and Durum Tour, with human beings out in the fields manually assessing spring wheat and durum crops in North Dakota and northwest Minnesota, plus Montana and South Dakota, has concluded with an average yield estimate of 48.3 bushels per acre, lower than last year’s estimate of 53.8 bushels/acre. The market has noted and moved on, but this stat will linger in the mind as a price-positive idea.

The wheat trading was pretty dull in the small hours of Friday’s session. Stay tuned. The change is gonna come.  

Market Bullets® Thursday, July 24, 2025: Pre-Dawn

     Low prices, according to all the best econ textbooks, bring smaller supply into the market, which in turn eventually may cause price increases. There has been lots of coffee-talk, but little substance to hints of Russian crop-shrink, although there are dynamics at work on our largest competitor that help paint the market background for wheat going forward.  

     Looking at future Russian wheat export effects on global wheat pricing:

     The profitability of wheat production in Russia has approached zero, or even become negative for some farms. In 2024, the average profitability in the grain sector in Russia plunged to 4.9%, down from 27.8% in 2020.

     To no-one’s surprise, wheat cultivation in Russia has become less attractive due to rising production costs and low prices (sound familiar?). Input costs in Russia, including fertilizers and quality seeds, have increased. For Russian wheat growers, high export duties, quotas and transportation costs for regions not directly connected to seaports further erode profit margins.

     Adverse weather conditions, including droughts and frosts over large areas of Russia, in the current year have negatively impacted wheat harvests, leading to losses and decreased yields, although the net impact on their available wheat for sale has been muted so far. Over time, wheat yields in Russia have been found to be more vulnerable to temperature increases versus the global average.

     With eroding profitability, some Russian farmers are choosing to reduce wheat cultivation and switch to more profitable crops like peas, lentils, or sunflowers. The planted area for wheat decreased by 1.2 million hectares in 2024, while the popularity of chickpeas and lentils surged.

     A general decline in the technological level of the Russian grain industry also is reducing production and profitability. With economic sanctions, diversion of government assets toward wartime priorities, economic uncertainty and high borrowing costs, Russian farmers are holding back on investments in updated equipment, relying on older technology and practices, lowering productivity and increasing vulnerability to weather or other production challenges.

     The Russian Grain Union has indicated problems with the availability of high-quality seed. Recent import restrictions on seeds from “certain countries” are adding to this effect.

     Russian producers are said to be cutting back on the use of fertilizers and other key plant inputs, making crops less resilient to adverse weather conditions.

     Conclusion: Russian wheat production may not allow them to aggressively dominate the markets every year. The amount of land in the world capable of wheat production has brought an end to most of the big weather-driven price rallies that used to herd the market season by season, even a decade ago. The sheer size of the Russian wheat production area makes them formidable producers even in a bad year. Diversification of variety, area and technology have set up a market less prone to weather-based supply issues, so the market cycle is proportionally more affected by economic or political factors now than by the weather. Given all the drag on Russian producers, wheat planted area may not advance as quickly as it seemed likely to just a couple of years ago.

     Low wheat prices are a self-correcting problem, stimulating more rapid consumption and less availability, ultimately less production. This is a game of comparative advantage, so we have to apply and reinforce our strengths; superior infrastructure for movement and storage of crops, better availability of high-quality seed and supporting nutrients/adjuvants, more efficient equipment and more, including our ability to adjust marketing plans in adverse markets.

     Stay tuned. The price wheel is turning, hopefully faster than a rotisserie.

Market Bullets® Wednesday, July 23, 2025: Pre-Dawn

     Jordan passed again on all offers in their on their international tender for 120k tonnes of milling wheat. Six wheat export companies had submitted offers.

     Tunisia will release results Wednesday for their tender for 100k tonnes of optional-origin soft milling wheat.

     Russia’s Ag Minister is projecting wheat production at 88-90 MMT, down from their previous 90 MMT estimate, with exports at 43-44 MMT, down from 45 MMT.

The European Union’s Monitoring Agriculture with Remote Sensing  (MARS) system puts soft wheat yields at 6.09 tonnes per hectare (90.55 bushels per acre), up from 6.08 tonnes (a micro, 0.16% increase from the previous estimate) still up 9% from last year, well above the 5-year average.

     We are beginning to see “wheat buy” ideas among the speculative trade houses. Mostly just talk, but talk that had been missing for many months. Objectives are various, but the $5.69-$5.75 zone as a target and the top of the 7-month range seems intuitive. That amounts to a target rise of about 20-25 cents. The idea seems very conservative, but we have to start somewhere!

     Tariff negotiations seem to be yielding some U.S. ag purchase agreements, including the most recent one with Bangladesh for an annual 700,000 metric tonnes of U.S. wheat. If realized, this amounts to a U.S. re-capture of a bit of market share from Black Sea origins. Small, but begins to add up.

     Early results from this year’s Spring Wheat Crop Tour will be closely watched with the first reports mostly hitting the wires on Wednesday. Late Tuesday initial reports indicate an average yield of 49.8 bushels per acre, lower than last year's estimate of 52.3. Heavier wheat production areas of North Dakota will be examined Wednesday. Most anecdotes surrounding spring wheat crop health focus on adequate moisture in key HRS areas in both the U.S. and Canada. 

     The Chicago Soft Red Winter (SRW) wheat monthly charts give some perspective on the nature of the long sideways price channel that has contained prices. The most positive aspect of this otherwise dull and difficult pattern is that the bottom has been very reliable, providing a back-stop for trading strategies. This well defined support level is valuable. A break down below the range low-end boundary would be a Big Deal.

     Steady on the beam. Changes are in the wind.     

Market Bullets® Tuesday, July 22, 2025: AM

     It was a choppy Monday session, after Friday's surprising rally. As of very early Tuesday morning the market was near unchanged. The market is still searching for its footing after failing to clear Friday's highs. It's almost as if the market took a big gulp of air on Friday, and now it's exhaling cautiously.

     If you want to see reality in a bigger picture, take a look at the monthly chart for Chicago Soft Red Winter (SRW) wheat. We are seeing a lack of conviction for a sustained upward trend. The bulls need to show they can hold onto gains and break above recent resistance levels to truly ignite a rally. Otherwise, we could be looking at a range-bound market for  some time to come as harvest presses forward into the last 25% for the season.

     The International Grains Council (IGC) is holding its 2025/26 world wheat crop outlook at 808 million metric tons (MMT), a slight increase from the prior season. However, they stil show slightly below projected consumption of 814 million metric tonnes.The implied tightening of global stocks has helped sustain the hope of many producers and theoretically should be supportive of PRICES.  

     But consider those Black Sea Blues (and Reds): Russia remains the big gorilla in the export room, with expectations of 84-85 million tonnes of production and ample export availability. Sanctions have forced them to price aggressively and a firm Ruble has continued to add pressure. The Russians will sell no matter what price regime they must face, and global buyers shrug their shoulders and grin, knowing that as long as the sanctions are in place, wheat will be cheap. The general effect on the price of wheat is negative.

     Meanwhile, Ukraine's crop is projected lower due to subpar yields in southern regions, leading to some premiums for prompt shipments. They also will sell no matter what the price. Holding back exportable wheat does not serve them as well as some cash flow.

     The question we might not want the answer to before breakfast... Where Do We Go From Here?" From a technical standpoint, the market is currently in a "wait and see" pattern. The rally on Friday was a nice pop, but subsequent sloppy behavior suggests it was more of a short-covering bounce than any fundamental shift in trend. Watch the recent lows closely for support. If we break below them, we could see further downside. On the upside, Friday's highs are the immediate resistance to overcome. A clear break and sustained trade above those levels would signal a potential shift in momentum...but it remains, “Wait and See”.

     For now, the overall trend for wheat remains sideways.

EXTRA
* Spring Wheat Tour Kicks Off! The 2025 US Wheat Quality Council's Hard Spring Wheat and Durum Tour starts today, Tuesday, July 22nd. These tours always attract attention, as it is as natural to walk out into a field and some informal “had thrashing” and bite a few kernals. These guys are serious counters, though. Keep your ear-buds peeled for early yield and quality reports, as these can definitely move the needle.
* Heatwave Watch: There's a high-pressure ridge expected in the central U.S. over the next couple of weeks. While not expected to be catastrophic for most summer crops, it bears watching, particularly for areas in the central and southern Plains. Heat is the last remaining wildcard!

Stay tuned. The most positive item in the lineup is that we have not seen a break to new lows since March/May 2025.

Market Bullets® Wednesday, July 16, 2025: AM

     Throwing the usual suspects, accounting for no movement, or “What skinny branch should the market stand on for support?”

     IKAR, The Russian “Institute for Agricultural Market Studies” is having a Summer Conference in Moscow (not Idaho) on July 17-18. There are seats available… They have cut their 2025 wheat production forecast to 3.013 billion bushels and their export forecast to 1.543 billion bushels, citing drought challenges in some of its southern production regions. The market is watching the numbers as harvest rolls. It’s hard to keep pregnancy a secret for long…If there are real drought problems, they will show up in the numbers at some point. Oddly, Russian agencies are lately more likely to stress crop shortages than to hold up a “everything is alright” sign. Maybe the locals are getting restless?

     Jordan passed on their international tender for 120,000 tonnes of milling wheat for Oct-Nov, after receiving offers from five trading companies. This tender will be repeated, probably in about a week. It’s a relatively small amount, but those can add up.

     Crude Oil prices have softened after a little spike last Friday thru to Tuesday. Diesel has been trading at close to the same level as late February, up some 46 cents per gallon from mid-April lows. The big trend channel for both crude and Diesel remains negatively sloped, and the talk among OPEC+ members is for increases in production.

     It appears that since President Trump gave Russia a 50-day deadline to end the Ukraine war to avoid sanctions, President Putin has taken that as a “signal to accelerate operations. Trump’s threats to send weapons to Ukraine has a long time delay attached, but it seems to be more in harmony with NATO’s perspective. The only effect on wheat would come from more sanctions applied to anyone who appears to be willing to deal with Putin, i.e. “BRICS” member nations.

     U.S. wheat harvest is rolling faster, as conditions are good for thrashing. Winter wheat is 63% done as of July 13th. There is wheat for sale…

     This is a time (quiet markets) where checking on the market performance takes only a few seconds. It’s still worth doing every day.

     The chart base is long and flat, a suitable platform for launching a price move. Stay tuned!

Market Bullets® Tuesday, July 15, 2025: AM

     The wheat complex pressed lower, out of the narrow, sideways range between $5.41 and $5.57 of the previous 5 sessions. The July futures faded out with a whimper, with the last 5 contracts delivered on Monday. Global harvest progress lies heavy over the market tone, with the most telling statistic from USDA about increasing production in the U.S. fresh in the mind.

     U.S. winter wheat is now at 63% complete, just under the 5-year average pace. Spring wheat is headed early at 78% and conditions are easing toward some improvement. There was another little surprise in the WASDE last Friday; spring wheat yields are expected to be better than the trade was expecting. Good production news is always bad price news.

     Russia is seeing harvest delays and there are rumors of terminal loading shortages as wheat is slower in arriving at shipping points than anticipated. This is a temporary price-positive in global wheat supply chains, as Russian merchandizers are sighing and breaking their pencils (demurrage is expensive).

     Canada and Ukraine are seeing some small reductions in production forecasts.

     U.S. export inspections for wheat slowed in the last week, as the year-to-date pace of shipping is lagging last year’s pace by just a tid.

      The tariff parade is seeing a flurry of new announcements of increases with more to  be added versus EU and Mexico on August 1. The pattern of hard threats and moderate capitulation is apparently yielding some agreements. The band plays on.

     Very early Tuesday trading is slow, down about 3½ cents, leaning into a reversion to the negative-sloped, 105-session mean line drawn from the highs of last February, and right on top of the Box-o-Rox 60-session moving average. We have no substantive trend, BUT the channel has been slightly positive, with higher highs and higher lows since March 29. This is where we receive the gift of the opportunity to be patient!

     The problem of “Too Much Wheat” can only be corrected in two ways; the passage of time or lower prices. Of the two, lower prices is more decisive, like ripping off the bandaid, and besides emboldening buyers, has the added longer-term benefit of influencing some producers to switch to other crops. Our best marketing response is to be more aggressive with periodic, incremental sales over time, while readying a “re-buy” strategy to be executed on a buy signal when it emerges (an admittedly speculative move, but one that just by being prepared, allows a certain relaxation of stress).

     The global markets are realizing that changes are in the works, and maybe the resolutions of some long-standing issues, but the tunnel curves here, so everyone is walking slowly. Buyers of wheat are hand-to-mouth, but they see the harvest clearly and will not have to extend themselves for many months from now. Producers are reluctant to part with their wheat, but there are always bills to pay, and the market knows this very well.

     Stay on plan. If ya don’t have one, make one. Divide up your wheat and sell it a slice at a time. Watch the charts for range highs (or range lows). Set price limits and talk about them with your merchant. Extract that extra 25 cents when it is available, knowing that even if you miss, the fact that it is an increment allows some foregiveness. At least it’s interesting!

     Let harvest be your “Friday night under the lights.”

Stay tuned.

Market Bullets® Monday, July 14, 2025: Pre-Dawn

     The WASDE was a whiff for those looking for supportive stats, as the trade decided that larger production of wheat in the U.S. is more important than better exports. The trade was short in their pre-report estimate of of All-Wheat production at 1.903 billion bushels, as the official WASDE was 1.929 billion, an actual increase of 8 million bushels and an error of about -1.3% for the “Trade Analysts”.

     Exports of U.S. origin wheat are projected at 850 million bushels, a 25-million-bushel increase. No surprise as that is what lower prices are supposed to do.

      Projected 2025/26 global ending stocks are lowered a marginal .45%, a 1.2 million tonne cut down to 261.5 million, primarily on reductions for Canada and the EU.

     The Chicago Soft Red Winter (SRW) wheat futures contracts fell out of bed to close down 9½ cents on the day and minus 11¾ on the week. KC Hard Red Winter (HRW) did no better, off by the same 9½, while Minneapolis Hard Red Spring (HRS) was the weakest at a minus 18¼ cent day and minus 34-cent week, the lowest weekly close for that contract since late May.       

PNW White winter wheat ending stocks for this year’s harvest is seen as 93 million bushels versus 80 million last year.

Last week, wheat markets rattled around like a rock in a narrow box. The trade worked hard to find anything to hang on to for positives. But like a perfectly baked loaf gone stale, the market quickly lost flavor after Friday's numbers hit the wire.

The USDA left the bulls wanting. If there was a hint of light, it came from the slight dip in global ending stocks and the 25-million-bushel uptick in U.S. exports. The market sighed and slid back into watching weather reports with diminishing effect on wheat as we flip over to the back half of the northern hemisphere harvest. As there were no longer any further statistical threats, the buyers retreated.

     Speaking of Boxes of Rocks, our Box-o-Rox indicator(s) have gone to “Execute scheduled incremental sales” status. Only Chicago held on by fractions to “Hold”. The simplicity of this indicator is its virtue, with the main idea of being slow to sell when in a defined uptrend and to accelerate sales in a downward trend, all the while dividing the total sales for the year into incremental amounts, e.g. 12 separate sales. This will help to beat the annual average while riding any uptrend that shows itself. Have a look at the BoR charts.

There is still support for this market, its just not strong enough yet to lift prices above the range.

Stay tuned, there are opportunities ahead.

Market Bullets® Friday, July 11, 2025: Pre-Dawn

     USDA’s July World Ag Supply/Demand Estimates (WASDE) is due out at 9:00 AM Pacific Daylight Time (UTC-7)/11:00 AM Central (UTC-5). On release day the market rarely makes a serious move ahead of the report. The tradition is to gauge the results against the trade consensus gathered by survey, and then react according to the accuracy of the guesses. There is sometimes a violent reaction if the trade is surprised, but even if they get it right the trade has a tendency to pause and then resume trade on report day, sometimes exhibiting a “brakes off” surge, even in the event of a dull report.

     Bloomberg’s survey of the trade suggests that the USDA’s world wheat ending stocks for 2025-26 should be 262.5 million metric tonnes, a marginal increase from the previous report. This “jiggling” of the forecast figures has little meaning, but when there is little else for the trade to apply to fundamental market analysis, it becomes magnified in effect.

     Of late, long-term trend for wheat futures has been within a broader horizontal trend channel or rectangle formation, a period of consolidation with the price moving between established support and resistance levels. A decisive break above resistance (e.g., 572 Chicago) would be a bullish signal, while a break below support (e.g., 499 or 530) would be bearish.

     The energy level of wheat prices is low. The trade has become relaxed, even complacent, as the sideways move has become a desert road through Death Valley, with the mirages shimmering across the horizon. The thought of a serious rally has become an old-timer’s story, “I recomember back in ’22, when the price moved from $7 to $12 in just two months!” Can those days come again? Mebbe…but it could be a while. Meanwhile, we have to focus on “opportunistic” approaches as we apply every tool to enhance our marketing without adding a foolish amount of risk. Holding large amounts of uncovered wheat in storage as a bet on higher prices later has never been an efficient risk. More money has been lost that way than will ever be admitted!

     Trend-followers have to be patient with up-moves, but also be aggressive when the trend is against us. Slow-walk sales when the trend is positive (let it ride), then accelerate when the trend is negative. Beat the average.

     Stay tuned for post-report review and end of the week perspective.

Market Bullets® Thursday, July 10, 2025: Pre-Dawn

     If you need to sell some wheat to pay the bills, but you are gut-sure that the price is about to rally sooner or later, it is a practical and not terribly expensive move to buy an out-of-the money call option in the wheat market of your choice. You can do this with as little as a dime. Just remember that time costs money, so the farther out ahead in time you go, the more it will cost for a given price level. It is always a higher cost and risk for better potential. It is not reasonable to buy a call with only a couple or three weeks to expiration. That is putting too much pressure on your certainty. It may be “far” out of the money, like an October $6.15 strike, some 43 cents above the current December contract (upon which it depends), but we have all seen that this market is easily moved that far with little actual reason, except for short-covering by the money funds. Then you have about 78 days until expiration for the market to do its thing. If you are wrong in that time, you are out about what it would cost to store the stuff for that period anyway. If you are right, and the market is near expiration and above the strike price, you can recover some of the “missed opportunity”. The strategy is bone-simple, can be improved upon, and options often expire without making anything, but may allow some reduction of the anxiety of selling wheat at painfully low prices. We like to do this when there is an actual buy signal as a trigger. Call your merchant for more information about this and other price protection strategies.  

     The wheat market has been grinding lower, but not all the way back to the range lows yet. On early Thursday morning trade, the Chicago wheat contract showed a little spark of life, with a quick jump to a positive 6 cents. It’s just nice to see. If there is a reason for the run, it is a headline or other wire-related tidbit, but there doesn’t have to be any profound basis for the move. Weather model shift, Chinese negotiation position change, or other “black swan” landing on the pond…all are potentials. What matters is how much buying power shows up on the charts.

     The trend channel is neutral, about 50 cents from low-to-high edge, and has a slightly positive tone. Friday’s WASDE may provide some direction.

     Stay on track. The longer this market goes without breaking out in either direction, the more significant it will be when it finally does…and it will.

One strategy I like to use is a “courage call”—buying an out-of-the-money call option between 5 and 10 cents. Once the market reaches the strike price of that option, it serves as a trigger to make hedges or cash sales. This way, you can commit to a sale while still retaining upside potential if prices continue to rally beyond the strike price.

The  resumption  of  the  Odesa  region  deep-sea  ports  operation  and  a  smaller  grain  harvest  in  2024

The  resumption  of  the  Odesa  region  deep-sea  ports  operation  and  a  smaller  grain  harvest  in  2024

 Keep an eye on two key market movers:

·         A shift in the weather forecasts

·         A trade deal announcement with China

Either one could quickly alter the current trajectory.

Historically, rallies this late in the season are rarely long-lived.

Market Bullets® Wednesday, July 9, 2025: Pre-Dawn

     National corn condition ratings gained another point this week to 74% good/ excellent, compared to 68% last year and the 64% five-year average. The weather is about is ideal for corn, lots of rain and heat. This is where they say you can sit on the back porch at night and hear the corn growing. Just plain intuition says this corn crop could be a whopper. For wheat that is a message not to ask for sympathetic price support here.

     Chicago Soft Red Winter (SRW) has gained 45 cents per bushel against KC Hard Red Winter (HRW) since the first week of January. This is a somewhat rare condition and a little surprising, since the traditional hard red bread wheat spends a great majority of time priced above the soft red, and this year some major HRW states had been struggling with drought. It may be that Russian 11% (dry) protein wheat has dominated the northern red wheat market by sheer volume and discounted prices. We are watching this relationship (see the spread charts at the bottom of the site page).

     There is an Exchange Traded Fund (ETF) under the ticker “WEAT” in which each “share” represents a bushel of wheat. It is based entirely on Chicago futures contracts and has some special risk characteristics. WEAT is usually liquid and is very easy to trade. The general trade perspective for WEAT at current levels is that the market is in a negative pattern, and WEAK is rated a sell. IF you decide to investigate the WEAT ETF, be sure to understand thoroughly what it is and how it works before you take any actions.  However small it may seem, there is still risk to your capital, and there is no-one responsible for your results but you.

     This wheat market has no mandate. Harvest will continue to dominate the factors driving the market for some weeks to come. Steady is the call.

     Stay tuned. Day by day conditions will change, until one day there is reason to move. The funds are still short (especially looking down the barrel of a heavy crop of corn and beans). We are watching, and the changes always show up first among the charts.

Good hunting!

World Ag Supply Demand Estimates (WASDE) Friday morning, July 11th, 2025.

9:00 AM Pacific Daylight Time (UTC-7)/11:00 AM Central (UTC-5).

Market Bullets® Tuesday, July 8, 2025: AM

US Exports of wheat achieved a twelve year high for this early point in the crop year, up 3.7% from last year.  This is not a surprise as wheat has become cheaper in bulk in both the trade levels and through a lower dollar exchange price.  There is no difficulty finding wheat for sale.

            Russia may still have a smaller crop than currently projected.  This is strictly a background factor at this point and is not a good reason to hold wheat in storage.  Winter wheat harvest in the US is past halfway at 53%.

            Indonesia has done a deal with US trade negotiators and signed a memorandum for 1 million metric tonne purchase annually going forward.  There are still negotiations proceeding on other goods.

            The CFTC’s Commitment of Traders (COT) report says large specs covered (bought back) a small net 1596 contracts in Chicago soft red winter wheat.  KC saw a similar change of 1114 fewer open contracts.  The net short-sold positions are still moderately large -63,671 Chicago and -42,348 KC.

            It’s a long road for marketers when the price is trapped in a 50 cent range.  There is temptation to speculate which just becomes an exercise in impulse that increases risk and expense.  Trading is a completely different business that has its own parameters and business requirements.  It can be done appropriately but not efficiently with wheat in the bin.

            Stay on plan.  Make the sales according to schedule.  Beating the average may sound like a dull goal, but if done well over time it is usually a massive gain…but you knew that already!  Stay tuned.  When the change comes it’s likely to be rapid

Market Bullets® Monday, July 7, 2025: AM

     We begin the new post-holiday right back to where we were last Tuesday, July 1 on the Chicago Soft Red Winter (SRW) wheat charts. Overnight the wheat market faded another 12 cents in SRW and KC Hard Red Winter (HRW). Minneapolis was off about 8 cents and Paris showed the equivalent of minus 5 cents. The prudent traders that were the buyers on Thursday were just covering some short-sold positions ahead of a perilous weekend. On Monday they were apparently replacing the sold positions from last week, along with some cash sales in the country triggered by harvest bills.

     The trend pattern has not changed significantly, still close enough to worry about range-low failure or at least another test of this year’s lows around $5.05 in SRW. Each day we manage to hold above that low is another day closer to a price rally. If it is in proportion to the duration and intensity of the neutral/flat-to-slightly positive slope of the charts, we may be able to declare a seasonal low and move on to another chapter. …Sorry about the repetitive comments. We will have to submit them to the Department of Redundancy Department.

     Monday will bring USDA Harvest Progress for winter wheat, spring wheat condition and Commitment of Traders reports that were delayed last week. 

     The U.S. Dollar Index has paused in its 4-month long decline. Not a trend-change but the first session to show positive numbers for the greenback in the global currency exchange for some weeks, even as it trades near its 3-year low. This is a very indirect and minor influence on daily wheat prices at this point.

     More volatility ahead, on weather mostly. Watch those lows around $5.05 in Chicago, and in KC they’re about the same price. HRS is still needing some supportive weather to make it to August/September without more crop-shrink. Stay tuned.

Market Bullets® Wednesday, July 2, 2025: Close

     Wheat and other grains futures will close early; 10:30 AM Pacific Daylight Time (UTC-7)/11:00 AM (UTC-5) Central Daylight Time on Thursday, July 3, 2025. Markets are closed on Friday, July 4, 2025 in observance of Independence Day.

     Most of the pre-holiday weekend decisions were made and executed Wednesday (to avoid potential low-volume trade on Thursday), but there is always a chance that the short session on Thursday will yield a quick spike, since it takes proportionally less volume to move the price on a short-day. It is more likely that it will be a muted session.

     In the time since the end of March, Chicago wheat has produced an upward-sloped channel of about 45 cents from the rising low edge to the high side. The price has racked back and forth inside the range 9 times, an average of 5 days each way. Today (Thursday, July 3) has already popped up 44 cents in 4 sessions. This kind of hunting pattern is very hard on many small trading accounts, but it counts as a new upward move in the larger picture and shows that there is life in what had been a dull market. Flipping over to the Weekly chart, it doesn’t look like much, but it has triggered the “Hold new sales” light on the Box-o-Rox board. If it whips back below that BoR green line, we will catch up on any sales that had been delayed at that point.

     Winter wheat harvest is about halfway, and since the earlier rain delays, weather has been good for running combines. This week’s Crop Condition reports will be delayed until Monday due to the holiday. Any long holiday during sensitive periods in crop development can bring market changes through weather or other developments.

     The price slope is mildly positive, but the range-top is once again at hand. Owning wheat at the range top will be a genius move if there is a breakout to the upside, otherwise it is just the top end and the return to test the lower end is due. Given the recent, repeated price behavior, the odds today seem to favor another low test. Trend-followers have to wait until there is a defined positive pattern to take action.

Stay tuned, we will track it here. Have a good 4th!

 Market Bullets® Wednesday, July 2, 2025: Pre-Dawn

     Every year the market pays attention to the same factors through spring and into summer. The market is aware that northern hemisphere harvest is pending, the crop is green and has potential based on the moisture available. The price volatility increases as the weather patterns shift and the crop matures. Then a point is reached when the crop begins to shrink slightly, as the ripening begins and potential expansion is no longer a factor (some time near the equinox). Harvest begins in the southern tier of wheat states.

      By the time harvest reaches halfway, the size and quality is pretty well defined. Usually somewhere along that road, unless there is a powerful and usually very obvious factor dominating the market, a seasonal low is printed.

     This year we have had multiple reasons to expect wheat prices to decline past the by-now-well-defined lows since last November, but they did not break down as many believed they would. The funds were massively short-sold on this expectation, but they have reduced their big shorts by 30%-40% over the last couple of weeks (co-incident with the roll out of the expiring July into September or later contracts). Now we are very nearly halfway into winter wheat harvest and there are no hemispheric, wide-area crop failures (even in Russia, although their announcements may suggest problems), and we already have a candidate price for seasonal low in every major contract.

     There is still wheat vulnerable to heat, but that is a fading factor in winter wheat. Spring wheat is struggling, with crop condition 20% or more lower than last year at this point. U.S. Hard Red Spring (HRS) represents only about 25% of the total wheat crop. Canadian HRS is in average condition.

     From here, if there is to be a rally beyond the top side of the recent range about 40 cents above current trading, except for spring wheat, it will depend less on changing supply and more on demand. The Tariff Parade is still marching toward more defined results, with ag sales still on the table. The U.S. Dollar Index has declined more than 10% since the end of February, making U.S. wheat more competitive in global markets.

     Add it all up and it looks like there is a chance for a gradual increase in price going forward, as we watch the spring wheat develop. We still have to wait until it is objectively visible on the charts, using some yardstick like the “Box-o-Rox” or similar tool.

     In the recent roll from the expiring July contract to the September, the continuous charts experienced an “artificial” rally of about 13 extra cents per bushel to account for the carrying charge from July to September. This put some of the contracts above the BoR line and back into “Hold up on sale” status. We feel that this is not much of an issue, as there has not been a failure of the support zone.

     The trend is still neutral to very mildly negative, but we have seen signs of life in the last couple of weeks.

     We will hold-up on new incremental sales until there is evidence that the pattern is against us (defined by a breakdown of the long-term price points that have held up below this market for so long or an objectively negative technical pattern develops.

     Stay tuned, kids. This market is not dead yet. We will track it.    

PS Copper is flirting with its all-time high, a suggestion of healthy global construction demand…or maybe due to lots of data-centers being built to house your family photos, or because the Ai said it will need them.

Market Bullets® Tuesday, July 1, 2025: Early AM

No Markets Friday heading into 4th of July weekend holiday.

     USDA’s Stocks Report gave us All-Wheat Seedings of 45,478 million acres seeded against the average pre-report trade guess of 45,438. The evident 40,000 acres will make just a tid more wheat than expected.

     Stocks of wheat in inventory were marked at 850.5 million bushels, 10 million bushels over the average trade guess and 145 million over last year at this point.

     The numbers from the report were very mildly bearish, just over the line, but the market seemed relieved it was not a larger miss.

     The weather report over the long weekend will be watched closely, but the 18-state winter wheat harvest is 37% completed versus 42% on average by now.

The PNW winter wheat harvest is still waiting for the north slopes and coves to dry out. Early hand-harvesting of a few heads shows maybe smaller heads than we have recently been used to, but some nice round berries.

      Overall remaining winter wheat condition is stable around 48% Good-to-Excellent condition versus 51% normal.

     Spring wheat condition is 53% Good-to-Excellent condition over the five major spring wheat states, a disappointment versus 72% last year.

     The roll-over from the expiring July futures contracts to September is complete. The charts reflect about 13 cents higher for September over July, a 4.3-cent per month carry as the July Chicago futures enters its physical delivery period.

     The pattern of this market has been sustained over and over again in a relatively narrow band of prices near long-term lows. Now even in harvest there seems to be healthy buying below the current price. Eventually this will chew through the “easy wheat” that gets sold at harvest to catch up on bills, opening a window for a sustained price rally. For now, the odds of a big price runup in wheat is remote. There is no problem for importers finding wheat for sale.

     If the world can stay sane for a month or two, we may see wheat move more easily into global markets, the easier the better for consumption.

The timing of the announcements of Tariff Deals for the Independence Day period is good. The objective impact on wheat prices may be noticeable.

     The U.S. Dollar Index continues to decline. Interest rates are sliding, with or without the Fed.

     The trend for wheat is still neutral, with little itty-bitty sparks of potential that may require some confirmation bias to see. The Box-o-Rox indicator is very close to going back up over the line to make a “hold” on new incremental sales. Depending on the type of chart, the market is right on top of the line. This will clarify shortly.

     Stay tuned, as the market continues to hunt for balance. 

Market Bullets® Monday, June 29, 2025: Pre-Dawn

     USDA Stocks-In-All-Positions inventory report and Acreage Estimates are due to be released at 9:00 AM Pacific Daylight Time (UTC-7)/11:00 Central (UTC-5). The wheat and other grain markets usually trade very gently until these reports are completed, then price behavior responds accordingly if the figures are outside of or within the range of pre-report guesses.

     The 1st business day of each month is a scheduled day for the Box-o-Rox indicator program during which if the daily price settles below the moving average all incremental sales will be caught up. This indicator is under further development. Please call, text or email via “contact’ with questions (see posted hours for calls).

More detailed commentary post-report.

     The U.S. Dollar Index versus a basket of mostly Euro-Asian currencies has declined 10.8% since the end of February, and is at a low last seen in March of 2022. This makes U.S. goods and services more competitive overseas, but it also makes imports to the U.S. more expensive in dollar terms (strengthens domestic companies’ sales).

     Let those combines roll! Keep the header in the wheat!    

Market Bullets® Friday, June 27, 2025: Close

     Wheat trade took a day off after 9 trading sessions of intense whipsaw price movement. Friday saw Chicago settle up 4½ cents for a minus 43-cent net on the week. KC HRW was minus ½-cent on the day and minus 44½ on the week. Hard Red Spring (HRS) plus 1¼ on the day, minus 28¾ on the week. Paris was in on the pattern with a plus 2-cent day and a minus 38-cent per bushel week. Range trading…aghh!

If we pull out the monthly charts, wheat has done nothing for almost a year of sideways movement with a range of about 88 cents. That has been just barely enough room for a couple of good cash sales. It may be small comfort, but at least the monthly chart shows that it has been what amounts to a storm in a teacup, especially as the world has seen wars and rumors of wars, tariff confrontations and fear and loathing on the deportation front. The wheat market has barely acknowledged any of the turmoil.

     The crop about to be brought in is not likely to be a record, but it will make wheat for sale. Monday’s Stocks Report and Acreage estimates will help concretize the nebulous shape of the northern hemisphere wheat crop. 9:00 Pacific Daylight Time (UTC-7), 11:00 Central (UTC-5).

     The CFTC’s Commitment of Traders Report on Friday revealed more short-covering, about 15,000 net short-sold contracts bought back in Chicago, and about the same in KC. Both contracts are still seeing relatively large new shorts, but less than half of the aggregate net shorts in KC since mid-May. 48,000 few net shorts in Chicago SRW. There is still work to be done here! The market lacks motivation. At this point it seems best to continue to market wheat incrementally on schedule. Box-o-Rox sells (or accumulates another) 1/12th each month on the first business day. The current market is trading just below the BoR moving average line, flashing a “Proceed with Incremental Sales on Schedule” signal. The BoR is only an indicator, and is subject to whip-saw movements at times.  

     The schedule for sales reduces this stress. Call text or email with a question about of this bone-simple indicator.

     The trend is neutral to negative, with the current price parked very near the low end of the long-term range. The northern hemisphere wheat crop is still expanding, but due to slow and reverse as it usually does as the crop matures. The market knows this.

     Stay tuned, drink more water. The heat is here!   

Market Bullets® Friday, June 27, 2025: AM

     The last three days of the last week’s decline, the volume dropped off each day. Thursday’s drop of 7¾-cents in Chicago was on half of the volume of trade as that of Tuesday’s minus 17¾-cents, strongly suggesting a deceleration of the move down. Very early AM trade on Friday had Chicago up 6-7 cents. KC Hard Red Winter (HRW) was up a nickel, as was Minneapolis Hard Red Spring (HRS). Paris was indicating a plus $.05 as well, so the end of the week may be the end of the acrobatic, month-end episode in which Chicago wheat futures was up 50 cents and back down the same in only 9 trading sessions.

     We will see a Commitment of Traders (COT) report released this afternoon, but the data will represent only through Tuesday’s trade. It seems certain that the funds were the sponsors of the price movement, but it does not read like a short-covering run…more like a late month-end/quarter-end roll with extra energy due to Russian drought talk and a cessation of active warfare in the Middle East. It does not matter much what precipitated the whip-saw pattern, since we ended up about where we started and were given a teaching picture of how difficult this “range-trade” business can be. We are at mid-May price levels once again.   

     Ethanol blending in gasoline in Brazil is double that in the U.S. as they are running at 30% ethanol in the gas versus 10-15% here. They also have biodiesel added to diesel fuel at 15%. If it were not for this special band of demand for corn and soybeans, those markets would likely be trading at a much lower price.  

     Monday morning we will have the Quarterly Stocks-In-All-Positions inventory report from USDA, along with the Acreage Planted update. Per reports of a Reuters survey, USDA is expected to raise its estimate for U.S. All Wheat plantings to an average pre-report trade guess of 45.438 million acres. Winter wheat as a class is projected to be lower than the March reported figure, with pre-report ideas at 33.299 million acres.

     The ending stocks update average pre-report trade guess for current wheat supplies is at 836 million bushels as of June 1.

Report day is nearly always a quiet pause before the stats are released, so Monday morning will likely be a low volume period. Once the trade has the new figures, then trading resumes, occasionally with big sudden moves if the trade had anticipated incorrectly.

     Monday’s data dump will occur at 9:00 AM Pacific Daylight Time (UTC-7), 11:00 AM Central (UTC-5).

     The International Grains Council (IGC) raised their official estimate of World wheat production to 808 million metric tonnes, a +.25% adjustment, and ending stocks for 2025/26 up 2 million tonnes to 264 million, +.76%.

     Wheat prices were trading without conviction at 8:30 AM PDT on Friday, up 2-4 cents on low volume. KC Hard Red Winter (HRW) was down 1-2 cents, and Hard Red Spring (HRS) was up 1-2. Winter wheat harvest is dominating the fundamental information space, as the world gets a little respite from Israel and Iran. The wheat price trend is neutral but Chicago is below the Box-o-Rox indicator line, giving a “proceed with incremental sales on schedule” signal.

     Stay on plan. Stay tuned.

Market Bullets® Thursday, June 26, 2025: Close

     The wheat complex has a familiar problem. Every time it pokes its head up and looks around the world, it finds more wheat for sale than needed so it ducks back down into its burrow for another six weeks of playing solitary on its phone. The natural, logical reaction to this fresh data is to go back to price levels that are more attractive to end-users/buyers in order to find more homes for homeless wheat.

     The U.S. Dollar Index has weakened more than 10% since the end of February, theoretically making U.S. wheat (and other goods) less expensive in the global markets, but there is still plenty of wheat being sold into the European, Euro-Asian and African markets, just not from U.S. origins.

     This is just the open wheat market doing what it must do in order not to become even worse, which could be taken to mean a totally government-managed, non-transparent pricing system, subject to quotas, export taxes and other features of a bureaucratic system.

     The morose tone of the wheat complex in this season is a normal, cyclical phenomenon! Whenever we get into a protracted period of too-low wheat prices, there are pressures to change “the system” somehow to make it “better”. There is no “better way” to solve the problem of too much wheat for sale than lower prices for as long as it takes.  

     Part of the long-term solution for wheat marketers is that we have to increase focus on marketing plans, evaluating risk versus return and bearing down on the ways to minimize exposure to a negative price environment. We absolutely must have a legitimate, operational plan for lower prices that is more sophisticated than “storing wheat until the price is better”.

     It’s only one piece of the puzzle, but a genuinely valuable one. The market will always be a challenge, but it can be neutralized in our favor. One thing has always proven to be true; It will get better.

     Stay tuned. Stay loose. Hang low, ready to go.

The result of this effort can produce improvements in profit margins over time, but it is not a panacea. If all we have is a hammer, then everything is a nail. The reason Chinese buyers are having such success at buying farmland in the U.S. is that the prospect of cashing out and letting the Ai take over becomes overwhelmingly attractive when the alternative is continuing to work for minimum wages (or less) on your own farm. If someone gave you a million dollars, would you farm until it’s all gone? These are dark thoughts, and unworthy. It is what “capitulation” looks like from the inside.

Market Bullets® Wednesday, June 25, 2025: Pre-Dawn

     No-one is complaining about the high moisture count and rising temperatures in corn country. On the contrary, corn futures have declined almost $1 per bushel since the end of February as heat and moisture are the twin factors most desired by growing corn plants. The funds have reduced their former massive net long-bought position by about 362,000 contracts in that time. There was some sympathetic “sisterly” support for wheat from the corn price until the decline began in the first week of March, 2025, but that source of positive influence on wheat is absent today.

     Complacency is a bad habit. We are guarding against relying too much on the long-term support lines on the graph. There is no magic in them, as there is plenty of room below, given proportion to the duration of the base from November of 2023 on the monthly chart. A break in such support would be a red flag.

     Paris 11% dry Milling Wheat futures printed a brand-new low dating back to March of 2024 on Wednesday. This contract reflects a wide area of wheat production from the Black Sea to the European Union (France is the largest). It is a global price discovery contract with increasing influence.

     Teucrium, a wheat futures based ETF (https://teucrium.com/etfs/weat), provides some technical comments along the way. The telling phrase from their current page: “There are few to no technical positive signals at the moment.” The Exchange Traded Fund (ETF) trades one-bushel equivalent shares. Be sure to examine their prospectus before taking action if you feel attracted to their product, as the fund has some special risks. The following is a reminder about risk:

     Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you, in addition to thorough discussions of worst-case scenarios.   

     Quarterly Grain Stocks report on Monday, also the ending stocks for the 2024/25 wheat marketing year. Analysts estimate a total of 836 mbu of wheat on hand on June 1. If the reports vary widely from the pre-report trade guesses, volatility is likely to result.

     We will go on monitoring the low side of the massive chart base pattern at about $5.05. If that support level fails to hold on a closing basis, the trap door will be open to a lower range. That is why planned incremental sales of wheat on a schedule can make so much sense over time.

     The four trading sessions in Chicago wheat futures ending at the close on Wednesday, June 25 gave us a 46-cent carnival-ride-style drop. It followed right on the heels of a similar rise on short-covering activities by the infamous trading funds. They may have merely turned around and replaced their short-sales in the September contract that had been carried in the July. When the money moves, it is because their algorithms and whatever other formal decision-making systems they apply tell them to. They are not normally subject to emotionally impulsive trading, and the market factor power they represent competes with government and the weather for influence. Occasionally their systems all go green or red at once.

     The Russian-based private market analyst SovEcon has raised their 2025 Russian wheat crop forecast from 82.8 million metric tonnes to 83.0, belying the announcement of drought problems in Krasnodar and Rostov Oblasts, among others. The market seems to be ignoring potential heat and wind problems in Russia, and every day that passes without serious evidence of crop deterioration, the smaller the chances are that there will be any.

     SovEcon this morning raised their 2025 Russian wheat production estimate from 82.8 to 83.0 MMT

     The European Commission revised forecast for cumulative 2024/25 soft wheat exports are at 19.93 MMT through June 22, down from 30.53 MMT a year ago. Their statistical crop year-end is June 30.

     All of the fundamental market factors are either neutral or negative at the moment. Russian drought does not seem to be hindering analysts from forecasting expanding estimates. U.S. wheat harvest is expanding rapidly. The long-term wheat charts for our best bellwether contract in Chicago Soft Red Winter (SRW) wheat are either neutral or negative in slope. It will take more than a 50-cent short-covering pop to break into a new market pattern at this point. “Opportunistic” marketing given a 50-cent, high-low range is remarkably like speculative trading, and it carries the risk of distraction from other tasks for a relatively low probable rate of return. Lets be careful out there!

Stay tuned.

Market Bullets® Wednesday, June 25, 2025: Early AM

     The world is working on what appears to be a new direction. The Iranians are exhausted, the Israelis are weary, as their leadership has expended a huge amount of political and social capital in an effort to change the status quo. In Iran, the now-old men in horn-rimmed glasses and black turbans are still in charge, but they sense change. On November 4, 1979, almost 46 years ago, 52 Americans were taken forcibly from the American embassy in Tehran by a group of young Iranians and held in a bid to re-claim some of the lost glory of Persia. It has been a long road to this point, but there is change in the wind. 

     The U.S. in 1979 was still dominating the global wheat market. If we had a weather problem in the Midwest, the price went up. U.S. wheat producers enjoyed a market share of the global wheat trade estimated to be about 45%. U.S. wheat was going into Russia, China and Japan, accounting for more than 30% of U.S. wheat sales. Latin America, the Middle East and Africa represented more than half of U.S. wheat sales.

Today, the U.S. market share of global wheat trade is about 11%. Russia alone now accounts for more than 22% of world wheat sales outside of their domestic use and would be closer to 30% of the total exports if not for the conflict with Ukraine. Ukraine would account for about 10% of global wheat trade (now at about 5%). Potentially, these two large wheat producers could reach nearly 40% of global trade under post-war conditions. This is coming. What shape it will take is still not clear.

     U.S. wheat growers are recognizing that wheat is now a widely diversified crop grown in so many different global regions that a weather event must by continental in size to move prices. We are adapting to the idea that the marketing of high-quality wheat requires a much more intense and deliberate study of the markets, price movements and opportunities than ever before. U.S. wheat is still vital to the world’s people. We can deliver more specific varieties and higher quality. This is our “comparative advantage” in the world wheat market.

     Innovation and high quality come at a cost, the coverage of which cannot be covered by government programs with 5-year plans. It must come from the open and free trade of wheat anywhere there is demand. This requires that we become and remain the best in the world at efficiently pricing and delivering what wheat customers want.

     The bellwether Chicago market is quietly trading down about 2-3 cents at 5:00 AM Pacific Daylight Time (UTC-7) Wednesday morning. The price has reverted to the 190-day statistical mean line drawn from the October 2024 highs at $6.17 per bushel. The downward move has been in proportion to the dramatic highs seen as the Russian tanks crossed the Ukrainian borders in early 2022, but this very large cycle is now nearly exhausted, as wheat trades today at a baseline price that was well established in 2020. There is always more room in any big trend, but this one seems “mature”. 

     All of the exchange contracts are trading at or below their respective “Box-o-Rox” (BoR) moving averages except Minneapolis Hard Red Spring (HRS). If there is a leader on the potential upside, this is probably the one to watch. We will be watching the Inter-Market Spreads.

     The baseline is still holding.

     It’s trackable. Let’s track it!

Market Bullets® Monday, June 23, 2025: AM

     Iran’s parliament apparently voted to close the Strait of Hormuz, that infamous “choke-point” for shipping that lies between Iran and Oman, a key global oil shipping passage, but the parliament’s actions are similar to our House of Representatives, able to make a strong political statement in passage of a bill, without any assurance that it will ever be finalized. It’s a safety valve. The supreme leaders still have the final say.

     There is very little global news wire content that directly affects wheat prices. The weather is always going to be a subject. It gets hot in the summer and there are either storms and rain, or high-pressure domes and heat. None of this is large enough to move a market the size of wheat. Once maybe, when the U.S. completely dominated the global wheat market back in the 60’s and 70’s but no longer, with a diversified world wheat production capacity.  

     When there is such a vigorous move in either direction, there is no practical way to forecast the next turning point. There is considerable momentum to the downside in Chicago wheat futures as of the early hours of Tuesday. A measuring point will emerge soon, but until that point shows up, we just follow the slope and try to stay out of trouble

     If we are marketing a portion of our production on a schedule, we will make the planned sale on time if the price is at or below our Box-o-Rox indicator line, otherwise we will stand back and concentrate on the larger picture. One thing we like to do is prepare a re-buy to be executed on an identified change in trend. There is no reason to buy right now.

Reducing risk over time requires a measurable and repeatable sales program that allows us to identify what is working and what is not. Incremental sales are a big part of that program.

     Diesel has printed some interesting charts. A large reversal to the downside with some follow-through on Tuesday morning has pushed the NY Harbor diesel market back to known ratio targets. Retail prices in the U.S. will lag considerably behind this whip-saw move, but the market clearly has taken some of the fear of Middle Eastern war.

     This is trackable, but requires patience, precious. Stay with us.

Market Bullets® Monday, June 23, 2025: AM

     Chicago wheat has given back the entire episodic challenge run to the previous mid-March highs, and has returned to the 39-session statistical mean line from the end-of- March lows. If you blinked or were away from the screen for a long weekend, you missed it!

     Diesel has posted a massive, single day downward reversal on Monday, opening with a stab to a one-year high and then collapsing back to trade below last Wednesday’s close. Crude oil is also $7/Bbl below its session highs. The session is still open, so anything goes, but it looks weak in the short run. (Resolution in the Middle East?)

    2-Year treasuries are trading slightly lower rates (higher paper price).

     Wheat is still trading above the Box-o-Rox indicator.

     More after the close.

Market Bullets® Monday, June 23, 2025: Pre-Dawn

     So far in the new week, the Chicago wheat futures contract is showing no impulse to follow-thru on the short-covering pop that showed up last Wednesday. It is not painting out the image of a new, powerful uptrend, at least not yet. Another credible indicator of Sukhovey wind or other crop-shrinking factor in Russia could trigger another run at the old high from mid-March, 2025 at about $5.75, but this line seemed to hold down the price last week. The market seems reluctant to break thru. The sellers are holding the line.

     The Commodity Futures Trading Commission’s Commitment of Traders Report that usually hits Friday was delayed until Monday PM, due to the Juneteenth holiday, but Monday’s numbers will not reflect Wednesday’s run, as they are issued each Friday as of the previous Tuesday. It is certain there were some funds covering shorts, but the volume of buyer-motivated trade will not be spelled out clearly until the coming Friday afternoon.

     Meanwhile, there is little or no disturbance of “rhythm of thrash” happening in the U.S. Midwest. 

     The Box-o-Rox indicator is flashing “hold new sales”, but the idea of selling the top end of the range is still valid, even with the pullback from Friday and early trade Monday. Its’ seller’s choice. For perspective, the market gave a 48-cent gain from Friday the 13th through the Wednesday jump, 4 trading sessions. Even PNW white wheat managed to peek at $6.40 for a few moments, the best it has been for many months, but it looks like that skinny little window is closing for now.

     The trend is defined as positive. The reasons for the market’s behavior are probably not fundamental in nature, more of a technical correction. It is the “Silly Season” for the wheat market after all. There remains much more for this picture to emerge. The trigger for more buying is the $5.75 number on the July futures chart in Chicago. We are about to roll to September, which is already at $5.80! Do not allow this “Continuous chart” artifact to confuse your signal! The carrying charge from Jul to Sep is almost 16 cents for two (2) months of storage. The memo from the market: “I don’t want your wheat today, please hold it in storage for a while.” Plenty of contradiction and dithering here, typical of range tops. *Hairball says, “Last Wednesday’s short-squeeze rally has not been repudiated (yet).” This is a hairball market.

     Stay tuned, there is more to come.

     *In Mark Twain’s “Adventures of Huckleberry Finn” Jim uses a hairball from an ox's stomach to predict the future for Huck.

Market Bullets® Wednesday, June 18, 2025: Close

No Markets Thursday (Junteenth) National Holiday

     Wheat led the way on Wednesday heading into the Juneteenth holiday.

     The only newswire item that may have helped trigger a short-covering rally (where the large speculative trading funds buy back previously sold contracts) was that at last Russia is admitting that there are real drought concerns in two of their largest wheat production regions. The market effects of the official announcements of “drought emergency” financial assistance for farmers in these regions may be debatable, as the Russians have never shied away from using such public media output to push prices, so we will avoid assigning heavy meaning about the forward outlook of global wheat prices, but we have probably not heard the last about the underlying drought issue in Russia, and that is a price-positive factor.

     Another conjecture may be that the funds have tired of carrying large net short-sold positions without much profit in the sideways price channel since at least last fall. The usual rollover of July to later contract months may be playing a role, as “buy July – sell September (or later) would require many contracts to be traded in the process. The spreads do not show any massive shift, so it is possible that the funds are taking the opportunity to merely “lift” their shorts and are moving on into other, greener pastures for the moment. Just sayin’…

     Having a reason to explain why a market jumps so hard after a protracted period of sideways range trade is desirable but not always useful. Correlation does not imply causation, and assuming a given reason may lead to faulty decision making going forward. The bottom line here is that a positive trendline is being confirmed on the charts. Chicago wheat futures are 69 cents above the lows of late March and are now challenging the intermediate March high at $5.75, leaving only the $6.09-$6.17 band as an upside target (another 34-42 cents).

     Our Box-o-Rox indicator is easily in the “hold further incremental sales” mode.

     PNW white wheat bids are the strongest we have seen since Mid-March of 2025.

     Friday is a weird day, caught in between Juneteenth and the weekend on a really nice early summer day, causing trading desks to be short-staffed as the senior traders are at the lake with family and junior personnel get to sit in the boss’s chair (but leave the cigars alone). Large trading decisions have probably already been made, so unless there is hot news from the front, the session may be lower volume. Midwestern combines will still be rolling into the face of the first really warm week of the summer for many early harvest test-cutting areas.

     In spite of some heavy fundamental supply statistics, the market is rallying right into harvest, a sign of strength and probably volatility ahead.

     This is getting interesting. It’s trackable. Let’s track it!    

Market Bullets® Wednesday, June 18, 2025: Pre-Dawn

     The wheat market is trying to trade on marginal statistics “trim a bit here, add a bit there”. Many ag-oriented news wire desks are opening their wheat segments with crude oil and Dollar Index comments (for lack of interesting items about wheat), but both of these key contracts are slightly off of their extremes of the last few days. The U.S. corn belt is getting some degree days of heat, but there is more rain in the forecast. Israel and Iran are both getting exhausted, but Iran seems to be on the ropes at present. It feels like we may be past the midpoint of this phase of the war. The markets seem to be on “hide and watch” protocol.

     Chicago wheat continues to hold small gains at push toward the upper end of the recent range. The summer season is warming up…it is surprising no-one. Winter wheat harvest is about 10% complete, with reports of decent test weights in Texas up through Oklahoma into Kansas. The spring wheat crop is getting stronger, still below last year’s condition level, but there will be a crop.

     On balance it seems like it makes sense to try to sell the top end of this range channel that has contained wheat prices for many weeks. The problem with range trading is that it works extremely well…until it doesn’t! The breakout in either direction, when it comes, will likely be violent and could be large, but that also seems unlikely until harvest and the inevitable maturing of the crop make the crop more definitely measurable.

     The Box-o-Rox indicator is reading, “hold sales”, but it has been tiptoeing back-and-forth across the line. Since it is not a “system”, but an indicator only at this point, it is prudent to watch the range for new patterns and sell incremental slices of wheat on a pre-determined schedule using “stops” with the merchandiser. A “stop” in this case means that if the price slips down to or below a certain price, there should be a sale executed automatically (or at least an alert phone call), otherwise no sale if the price does not drop. Some desks will do this with you and some will not. Call ‘em and ask. It helps to have a good relationship with your favorite co-op buyer.

The short-term trend is still upward, but demands close observation.

     The biggest weight on prices is the harvest, but the market already has accounted for that. The lack of direction is a sign of lack of motivation.

Stay tuned.

Market Bullets® Tuesday, June 17, 2025: Pre-Dawn

     Diesel and WTI Crude oil contracts both jumped over 7% on the Friday session on the track of Israeli pre-emptive strikes on Iranian nuclear facilities, key nuclear and military personnel along with significant “head of the snake” hits on high ranking military officers. Iran has “withdrawn from talks with the U.S. on nuclear limits”. The availability of crude oil and distillates has not be directly affected (yet). It does appear that Iran’s response has been somewhat slow and ineffective so far, and Iran’s proxies and allies in the area have not expressed intentions to enter the conflict directly (yet). The correlation between the Israeli/Iran strikes and response should not be considered causation for a wheat rally. Most U.S. markets are far away from the Gulf of Oman!

     The wheat market jumped vigorously Friday, with gains from 13-18 cents per bushel across the futures board (including Paris 11% dry milling wheat). The funds move on more than once set of principles, and when the money moves it can create trend-affirming power. At times they move due to fundamental changes in wheat supply/demand factors, but sometimes they move because of a Fear Of Missing Out (FOMO). When war or rumors of war create large potential market moves in crude oil, diesel fuel, gold, or anything peripheral, the money managers become anxious. Wheat has not produced much in the way of profits for many weeks of sideways trend-channel behavior, and the decision to move capital to more active and lucrative sectors is not uncommon.

     The weekend weather and intensity of Middle Eastern war will set the tone for Monday. Meanwhile we recall that the World Ag/Supply/Demand Estimates report on Thursday was not necessarily negative, but in fact held some mildly positive new figures for wheat. Altogether the table may be set for yet another challenge of the recent highs. Many trading teams will be reviewing all of USDA’s stats and the Russian weather again before trade begins early Monday. It will become clear early if there is to be follow-thru on Friday’s anxious rally. 

We will be watching.

Market Bullets® Friday, June 13, 2025: Pre-Dawn

     The World Ag Supply/Demand Estimates (WASDE) came to a soft landing on Thursday morning, with most new ending-stock figures just a percent or two smaller than the average pre-report trade guess. With the single exception of global soybean ending stocks, none of the official estimates for domestic or global wheat, corn or beans were outside of the range of trade ideas. This reads like a mildly price-positive report, but the market pretty much ignored the stats and went straight to overall improving crop condition in most production areas.

     The largest variation from trade guesses was the U.S. new crop, all-wheat figure, for which the guess was 2.89% above the USDA forecast at 262.76 million metric tonnes (9.65 billion bushels), a 10-year low.

     It takes a wide area being deeply affected by adverse weather to move the markets with conviction. There was a single exception in fading U.S. Hard Red Spring (HRS) wheat (probably some Canadian HRS as well) crop condition, leading to a plus 1¾-cent gain on Thursday. HRS is the only wheat futures contract to be trading above it’s Box-o-Rox (60-day moving average) price at the close.

     Other Global crop surveys are coming in with incremental improvements in wheat crop expectations.

     Strategie Grains (a private French company specializing in European and global analysis) increased their 2025/26 E.U. soft wheat production estimate 0.69% from 129.8 to 130.7 million metric tonnes.

     Coceral (a European trade association) raised their 2025 E.U. + U.K. soft wheat production estimate a hefty 4.3% from 137.2 to 143.1 million tonnes, versus 126.3 million tonnes last year.

     In Argentina, the non-profit Rosario Exchange lowered their 2025/26 Argentine wheat production estimate from 21.0 to 20.7 million tonnes on excessive rain at planting season. Even with this most recent decline in estimated production, it is the third-largest wheat production expected in the last 15 years for Argentina, continued evidence that the new administration led by President Javier Milei, elected on December 10, 2023, marks a significant shift in Argentine politics and trade policy. Milei is of a libertarian perspective and the first of this philosophy to be elected in many decades. His administration bears a focus on deregulation, austerity, and reduction of the size of the state. Argentina is not a current potential member of BRICS, and unlikely to join. In the 1980’s, Argentina was a dominant world player in the wheat trade, a position that was lost under several socialist administrations that came later. It looks like they are back!

     A month ago the wheat market was building-in some price premium against northern hemisphere wheat crop limits, but the conditions have improved enough to render that risk less in the eyes of the trade. Once again, the market is testing the resolve of the buyers at the lower long-term price range percentiles. The global trade seems untroubled by this development!

     The trend for wheat remains range-bound and seems likely to be so until there is a significant development. Potential Chinese wheat buying, always a chimera in global markets, is in the coffee-talk, at least for the moment. There are rumblings of crop difficulties there. Then of course there is the “tariff parade”.

     There is reason to follow this market closely. When the market ignores stats in the first hours of trade after a report, the reality often bleeds through and shows price support later.

     Stay tuned, as there is always more to come.

PS: DUBAI, United Arab Emirates (AP) — Israel attacked Iran's capital early Friday in strikes that targeted the country's nuclear program and killed at least two top military officers, raising the potential for an all-out war between the two bitter Middle East adversaries. It appeared to be the most significant attack Iran has faced since its 1980s war with Iraq.

Market Bullets® Thursday, June 12, 2025: Pre-Dawn

     Thursday, June 12, 2025 World Ag Supply/Demand Estimates (WASDE) will be released at 9:00 AM PDT / 11:00 AM Central).

     Various trade analysts are putting up pre-WASDE guesses about old-crop wheat ending stocks for all wheat that average about 842 million bushels, compared to 841 million last month.  Pre-report new crop ideas are averaging 924 million bushels, just one (1) million up from last month’s USDA figure. The immediate effect of these trade estimates on prices immediately after the official new figures are released is to create upward pressure if the guesses are too large and downward if too small. The price effects are usually temporary, but can be profound if the trade is surprised. By 9:30 AM Pacific Daylight Time on Thursday morning the market will have absorbed most of the new data and taken action. Meanwhile, many traders and other decisionmakers are in waiting mode. 

     The House-Passed Reconciliation Bill has a long way to go at the Senate, then there will be a reconciliation conference after that. The Farm Bill will come later.

     The U.S. Dollar Index is nearing a one-year low. Since the end of February the Index has declined about 9.33% in value versus other currencies, a domestic inflationary effect, but U.S. export are more competitive as a result. The Index does not include the effects of the Chinese Yuan or many of the Pacific Rim currencies of countries likely to buy wheat.  

     Depending on market reaction, we may provide a commentary after the WASDE.

     Stay on the trail, the wheat market is bound to deliver opportunities that must be seen to be taken. Good hunting!

Market Bullets® Tuesday, June 10, 2025: Pre-Dawn

Coming soon: Thursday, June 12, 2025 WASDE Report (Release time: 9:00 AM PDT / 11:00 AM Central)

     Tuesday morning showed Paris indicating down about 3-4 cents. Minneapolis Hard Red Spring (HRS) also off about 3-4.

     The “Range-Trade Game” is being played. The Chicago July wheat delivery contract as bellwether managed to reach precisely up to the previously defined high end of the hi-lo channel (Twin April 11 and May 21 highs). The pressure of willing sellers quickly overcame the hopeful but poorly armed buyers, so back to the lows we go… Chicago has given back 19 cents from the $5.57 upper target and is now right on top of our simple Box-o-Rox moving average at $5.38, below which a close will flip the indicator back to “Advance Incremental Sales’. Some kind of test of the $5.26 low, then potentially all the way back to $5.05 is the new target range.

     Eventually this market will settle down, but for now the spring season is legendary for such whippy price behavior. The Sukhovey wind is always just a few days out, and if it emerges in Russian wheat country it could trigger the long-hoped-for fund buying. It can be a challenge for traders, and for the inherently long marketer with only a selling mandate it requires a little more attention to the charts for that extra dime or 20 cents per sale, improving the year’s average while reducing exposure.

     The trend is still sideways, but we have no short-to-intermediate time-frame factor upon which to hang our wallets.  There is still downside potential, as unlikely as that may seem. The market does not care and will never clearly answer the question, “How low is low?” until it is already past. Meanwhile, we will watch those boundary lines for breakouts.

     Diesel is still rising short-term, having now gained 16 cents via 40,000 gallon lots delivered NY Harbor since May 30th, now trading at $2.14. The USLD market had been slightly inverted for a while, with nearby delivery contracts higher priced than later periods indicating that demand was stronger sooner than later, but today the market is about flat, giving no incentive to carry inventory, implying a possible pause pending. The larger year-to-date pattern is still negative, but the current price is trading at the upper boundary of the channel. We are watching Chinese demand for potential slow-down.

     Escalation of war in Ukraine is drawing some attention in the global grain trade, as Russia presses hard with new attacks and the U.S. “re-directs” attack drone supplies away from Ukraine. The effect on global wheat trade remains subdued, as there are abundant supplies of wheat available for sale elsewhere. An end to that war would be a wheat price negative.

     There are opportunities in wheat prices, even in this confused and volatile period.

It’s trackable. Let’s track it!

Market Bullets® Friday, June 6, 2025: Close

     COT report released Friday as of June 3 positions. Small changes in net short-sold positions in Chicago and KC – still historically large.

     Diesel is up to a high dating back to May 12, a 13½ cent per gallon gain from that intermediate low. The main trend in Diesel is still contained in a wide negative-slope channel, with a high side right at the current trading level. Interesting week coming up.

     Box-o-Rox showing “Hold Incremental Sales” on confirmed 13-cent break above the moving average.

     Wheat prices ended the week strongly positive, plus-20 in Chicago Soft Red Winter (SRW) July contracts, up 17 in KC Hard Red Winter (HRW) and up 10 in Minneapolis Hard Red Spring (HRS). PNW/Portland white wheat recovered from a slight dip to settle unchanged on the week.

     Chicago as the leader failed to break out above above the April 11 and May 21 twin peaks at $5.57, settling less than 3 cents below that challenge.

The trend has been positive since May 13 and has gained about 50 cents in that time. HRS is the only futures contract to rise above the April level, mostly based on less-than-optimum condition and need for moisture.

     The next week ending on June 13 will be technically intense. If the Chicago contract can close decisively above its technical resistance level, it will complete a “1-2-3” reversal, an old-school pattern that is relatively reliable.

     The challenge for a marketer is that we are near enough to the top end of the range to make an “opportunistic” sale based on that range, but our BoR indicator is flashing a “Hold”. It may pay to be watching a little closer now.

     Stay tuned for the next chapter in the saga.  

Market Bullets® Friday, June 6, 2025: Pre-Dawn

     What would you do if you were on the buying side of the equation? Would you load up? The buying group is at a space in the market in which they already have “loaded up”, so the enthusiasm for taking on more is at a low. Importers are feeling no pressure to change their pattern by extending receiving dates much farther than they already have.

Word has it that Russia had removed their minimum price rules (around $250 per metric tonne). They want to clear out some old crop, but the trade expects this (not startling) announcement will have very limited effect on movement of Russian wheat.

     The weather forecast for the Hard Red Winter (HRW) wheat harvest may be slowed by rain. This is not likely to move the price much, although the market is seeking reasons to buy. It just is not that unusual in early harvest to have a rain-day or two…just change oil, blow out the air filters and tighten the chains a notch and put a new sparkplug in the fuel truck pump. Take a nap (I always did like the smell of rain at 4:00 AM during harvest).

     The spring wheat crop is lagging. It is still early to declare big trouble, but the overall health of the 5-state spring wheat crop is shaky. We will  watch the inter-market spreads for confirmation that the trade believes there is trouble in the Dakotas and Canada.

     The export market is slow. Weekly new crop sales came out at 449,100 metric tonnes versus 711,400 last week (see first paragraph).

     PNW white wheat price basis (Portland white wheat minus Chicago Soft Red Winter (SRW)) has declined 30 cents per bushel since mid-May on flat to steady SRW and slow movement of Soft White. When Chicago gains on white wheat by doing nothing, it is the definition of a dull market.

     The trend in Chicago is slightly positive for the second attempt to challenge the old late March highs at $5.75, about 35 cents above pre-dawn trade on Friday. That is quite a stretch from here without a new piece of data. It is near time to take another incremental slice of wheat sales.

     Stay tuned, changes may come quickly.   

Market Bullets® Thursday, June 5, 2025: Pre-Dawn

     The international markets are in a granular, incremental, cautious period. There are developments in several key ag markets, but all backgrounders. Interest rates are slowly declining in the 2-Year Treasury Note market, a pattern that can be interpreted as a declining risk environment, with money moving toward equities and other more aggressive investment sectors. For wheat that is a generally positive piece, as acquiring, shipping and processing are all generally unimpeded (for the moment).

     The Chinese Yuan in U.S. Dollar terms has  - once again – turned stronger (negative on the chart) toward fewer Yuan per USD, below a long term flat top formation in place since 2022 (the top end of a “managed” value).

     Meanwhile the Russian Ruble has paused in a rapidly strengthening move against the Yuan that started in January, making Russian wheat more expensive to the Chinese.

     The currency moves are indirect and not as powerful in influence as weather or government machinations, but they are a factor to watch. These short-term Yuan and Ruble actions are a very mild wheat price-positive.

     Diesel remains in a very broad downward channel, with OPEC opening the taps for a bit more production. Putin is a heavy, but behind-the-scenes influence on OPEC+, as he seems to prefer to let the House of Saud, et al lead the headlines. The energy markets are watching to see if the U.S. will expand production. Break-even prices for new Permian wells are said to be $65-$70, and smaller shale producers need at least $60 to justify costs. With recent trade in the low $60’s for West Texas Intermediate, the incentive to aggressively expand U.S. crude oil production is limited. There is fuel cost pressure on wheat production, but the current wheat market is not sensitive to this factor right now – just the cost of farming! – Watch for the phrase “biofuel policy” in coming weeks.

     Wheat prices rally potential is likely to be limited due to accelerating northern hemisphere harvest unless there is a massive adverse weather shift.

     The wheat price trend is neutral, in an approximately a 50-cent range. “Box-o-Rox” status is “Continue to be caught-up on incremental sales.” Option values are tradable, so do the math and practice “thought experiments” to improve understanding of this valuable market. It takes a bit of time to become intuitive about the language and risk/reward curves, but it can pay off in a marketing plan over time. Meanwhile…

     Stay tuned, the change is gonna come. It’s trackable!     

Market Bullets® Wednesday, June 4, 2025: Pre-Dawn

     When the wheat market gets tangle-footed over a 2% change in estimates, it has become very sensitive. The winter wheat crop condition estimates as of June 1 improved by such a margin, rising to 52% good-to-excellent (GEx), just as it dropped by the same amount last week. With nearly nothing to bite on in the news wires, we get a little over-focused on these incremental guesses.

     The PNW winter wheat crop was reported Monday with WA at 75% GEx a drop of 2%, OR at 61% was up 1% and ID showed 79%, a plus-4% week.

     Harvest in TX is at 25% versus 27% normal. The headers are turning on schedule.

     Spring wheat condition for the second week of reporting for this crop year is 45% GEx compared to 74% last year. WA reports at 59% and ID at 69%.

There are no serious overall threats to this crop at this point, leaving the market thirsting for tradable data.

     Ukraine and Russia will continue to bite and claw at each other. The so-called “Trade War” that is thrashed every day in the mainstream media seems steady as far as an outsider can perceive. There is nearly no impact on global wheat trade movement so far. Another empty bowl for traders seeking news nourishment.

     The charts are revealing only a narrow range of prices over the last 26 trading sessions since the end of April, about 50 cents from low to high in Chicago Soft Red Winter (SRW) with no definable slope. KC Hard Red Winter (HRW) Wheat has an 80-cent range, and Minneapolis Hard Red Spring (HRS) shows 55 cents, but with just a bit more enthusiasm than the other two exchange-traded wheat futures contracts. PNW wheat is stable around 5-10 cent variation.

     A 50-cent range from high to low is a challenge to us marketers. Just about the time the range boundaries start to seem inevitable, the pattern changes. It is a test of patience, and of discipline in making incremental sales on schedule, when it seems obvious the market is at a long-term low. When this perception becomes overwhelming, it still makes sense to cut exposure to stored wheat, with its expenses. This is when it becomes sensible to examine a re-buy strategy with your merchant, but not directly on the heels of a reluctant sale. It is for when the market actually awakens and begins to trend. It won’t be hard to see when that happens, it just is not yet.

So we hide and watch.

     The trend is neutral. Watch the Box-o-Rox and practice reading the call and put options tables.

Stay tuned.

Market Bullets® Friday, May 30, 2025: Pre-Dawn

     Paris 11% dry milling wheat printed a new. 1-year low on Thursday. It is not a powerful, unequivocal shot…just -€.75 (about -$0.023 cents per bushel equivalent), but a break below the 18-session series since May 5th. The Paris wheat contract has been increasingly effective as a global wheat discovery point, taking into account the absence of any Black Sea public indicator of wheat values since 2022. This little break is not a sell signal, but must be noted. It is no surprise that the global wheat price arena is sagging under the weight of expanding production figures from many sources.  – very early trading on Friday indicated a gain of €.75 per metric tonne, washing out Thursday’s loss (bearing in mind that this is microscopic analysis).

     Friday morning early trade is showing Chicago up about 3½ cents, around $5.37½ in July contracts. Minneapolis spring wheat futures were strong on Thursday. Friday had July HRS up about 7½, mostly on 45% good-to-excellent ratings from USDA on Tuesday, a bit lower strength than anticipated by the trade, although it is still very early in the season to predict results.

     The week-to-date for Chicago wheat July contracts is about minus 5 cents heading into Friday’s day session. Minneapolis is up 9 for its week with Friday to go, while KC Hard Red Winter (HRW) is down about 2¼.

There is no reliable short-term trend upon which to rest a trade decision as of Friday early AM. The bottom is perilously close. It will pay to watch that low if you have wheat on the table for sale. If it breaks below the $5.22 line in the July contract, consider it a warning!

     Stay tuned here. We will be watching for a useful indication of change in the price pattern.         

Market Bullets® Thursday, May 29, 2025: Pre-Dawn

     The wheat market is sitting in idle, and there is nobody in the cab. Probably went for coffee and was afraid that if it was not left running, the battery would be too weak to start again. Anyway, staring at the wheat plants and straining for them to grow is probably not good for the digestion. So it’s back to the shop for a touch up on the brushhog or to rotate the pickup tires.

     Most major global wheat production regions have received at least some rain over the last 3 weeks. There are many areas still in drought, but the size and number of these is shrinking slowly. The wheat trade is not seeing any looming moisture issues large enough to move wheat prices for more than a day or two.

The global currency markets are stable. The Russian Ruble continues to gain ground versus the Dollar and Yuan. The U.S. Dollar Index is up about .42% for the month of May-to-date, although in a clearly defined downward trend that started back in January. Part of the Dollar weakness is based on soft interest rates in the Treasury market, Fed or no Fed. The financial environment is a bit “squishy” with the Tariff Parade bogged down by Federal court rulings and delays. This is not a price negative market element, but we consider it to portray a market near equilibrium, without mandate.

     Private Russian analyst SovEcon raised their 2025/26 Russian wheat export estimate from 39.7 to 40.8 million metric tonnes.

     India’s farm ministry is estimating their new wheat crop at a record 117.5 million metric tonnes, up from 115.4 million in their March report. India is occasionally able to export wheat in such years.

     European soft wheat production is expected to increase by about 13% over last year.

     The market is still acting weak, but has not created any new patterns or threats. Its trading near some long-term lows that have held for many months, a characteristic of a chart bottom that if broken down would set up capitulation selling. There is no reason to expect this now, but that line is a key decision point for many traders and deserves close observation. Harvest is near, and the market smells it.

     This is trackable, even when its dull. Let’s track it!

Market Bullets® Wednesday, May 28, 2025: Pre-Dawn

     The wheat market as portrayed by Chicago futures had begun a slide back toward the recent lows, but USDA’s Crop Progress Report released Tuesday provided a little braking. Last week and again this week, the U.S. winter wheat crop was rated lower by an overall 2% in health versus the previous week, surprising the trade and helping to trigger a price run that ran right up to the challenge price at $5.57 (but did not break out). Now for the second week in a row, the Progress report has shown a -2% in crop condition, this time helping to staunch the bleed-off of the short-covering gains from last Tuesday’s rally. 

     This kind of micro-calibration of the market each day is something we probably should get used to, as the macro-factors with the power to move the market to new levels are not shifting at present.

     The spring season often has a volatile character, but this year we have been bottom-fishing in a weedy lake. The pattern for wheat is sideways, with some occasional disturbance, mostly based on large money-fund movement. The test of marketer’s patience is severe. Global wheat consumers look out into the market and do not see any reason to stress about wheat procurement.

     “Opportunistic” marketing means close monitoring to capture 20-50 cents more per incremental sale, all while monitoring the low side of the range for price break-downs that push us toward accelerated sales.

     The current Box-o-Rox (BoR) indicator is for “complete incremental sales as planned”.

Stay tuned. It’s trackable.  

Market Bullets® Tuesday, May 27, 2025: Pre-Dawn

     For 2024-25 to date, accumulated U.S. wheat export sales are about 13% above last year at this point.

     The southern plains wheat states have abundant rain in their forecast for the next 6-10 days. Although the Hard Red Winter wheat production in Texas, Oklahoma, Nebraska, Kansas and Colorado have suffered from short moisture in the last couple of years, they have seen some improvement in crop harvest prospects in the last few weeks. This upcoming rain cycle may be almost too late to make a large difference in the lower tier, and some areas may receive too much, with 3-5 inches possible. The market will likely take note and watch for damage. What might have been a threat to prices based on possible crop improvement may be less so at this stage. Heat is needed now to increase the crop.

     Argentina, after many years absent from the competitive wheat export arena due to their government policies, is about to re-emerge as an aggressive source of wheat in the southern hemisphere. There was a time when they dominated the winter phase of the global wheat export.  After being invited to join the nascent “BRICS” global economic group in August 2023, the new Argentine government under President Javier Milei formally withdrew from the application process on December 29, 2023, stating that they will; not consider joining BRICS appropriate.This decision was a policy reversal from the previous government and was driven by Milei's shift towards closer ties with the West and his criticisms of China and Russia. 

     France’s AgriMer is estimating 71% of their soft wheat crop is rated good-to-excellent condition through May 19, a 2% reduction in health from last week, and still quite a bit better than last year at this point.

     The U.S. domestic wheat trade saw a healthy price pop last week, due apparently mostly to short-covering (Buying back previously sold contracts) by large money speculative funds. There was also an increase in cash wheat sales, as opportunistic marketers look to clear out last year’s remaining crop ahead of harvest, and in a market that had been moribund-flat for many weeks. The technical trade noticed that even with the strong performance, an important confirmation level at about $5.57 in Chicago July contracts was not achieved, leaving the market in limbo going into the new week. At 3:30 AM Pacific Time (UTC-7), Chicago was down only 1 cent at about $5.43½ after putting in an after midnight low around $5.38½…small moves but somewhat buoyant. This week may be volatile, especially if the funds decide to do another tranche of buying, which may support the brand-new upward bias.

     Stay tuned.  

Market Bullets® Friday, May 23, 2025: Dawn

    The price of wheat has given us a new squiggle on the charts. We are now at the second stage of a potential confirmation of change from a flat or negative price pattern, in which the buyers are encouraged and the sellers are nervous for the first time since February. The market structure is different today compared to that late winter rally. The Commitment of Traders (COT) showed the large speculatives coming up from a net short of about 91,000 contracts in Chicago. The most recent report shows that net short to be 118,000, although the recent 30-cent pop will probably reveal some reduction of that this week. There is still quite a bit of powder in that keg, but we do not know if there is enough general anxiety to push the fund managers into continuing to reduce exposure to their historically large short-sold positions.

     The challenge price for Chicago July futures to prove that there may be a new breeze blowing in the wheat complex is about $5.57, 17-18 cents above early trade Friday morning. (look up “Sukhovey”)

     The Global wheat markets have been remarkably stable amidst all of the tariff parade and other political stuff. We did miss what had to be one of the most blatant political moves by China as they bought some 400,000 to 500,000 metric tonnes of Canadian and Australian wheat, announced on May 9th. This is not a shocking or unusual set of transactions. It’s just the timing that is elegantly pointed at the U.S. during tariff talks. The key to remember is that China is struggling with crop shrinkage due to early heat. Any wheat buying in the global market is healthy for global prices, especially when it has not been assumed by the statisticians.

     The wheat markets are more volatile and jittery, making option prices expand a bit. Good for some option strategies (spreads) and less good for some (Outright buyers). Keep doing the math and watching the spreads, it’s a healthy exercise. Take a look at our “Calender wheat spreads” page.

     Chicago July wheat futures are doing a little tap dance around the Box-o-Rox (BoR) green line on the daily chart, standing just a few cents above the BoR, which keeps the “hold incremental sales” light on. So far there have been three (3) daily closing prices above, and Friday’s close will make the 4th, as well as the weekly, boosting confidence in the hold indicator.

     We need a little more to begin to get excited, like a solid close above that challenge line at $5.57 or higher.

     Stay tuned. The weekly close will tell a decent, if small story. “Opportunistic” marketing bears a strong resemblance to “Speculative Trading”, although it is not quite the same. That is one of the benefits of incremental sales…it allows patience with small, new-born uptrends.

Market Bullets® Thursday, May 22, 2025: Pre-Dawn

     The Russian Ruble is at its strongest international trading rate since May of 2023. The effect of this gradual change is mostly to make it easier for Russia to purchase war materials and to somewhat improve their standard of living. The pressure that Putin had been feeling from an extremely weak Ruble has abated. It begins to look more certain that he will be in control of Ukraine’s economy at some point soon, consolidating his gains in ability to control global wheat prices.

     The northern hemisphere wheat crop condition is stable, if not continually improving in health. The trade reaction to the recent rally has been to blame the short-covering on the appearance that the crop is vulnerable to adverse weather, including excessive moisture. The seasonal tendency now is for the temperatures to rise and for rain to taper off. Most of the subsoil moisture deficits across Hard Red Winter (HRW) wheat country have been overcome. Some of the southern districts of Russia are still weak and dry, but the size of the damaged area is smaller. In order for this overall factor to become the driver for the hoped-for price rally in the wheat complex, there will have to be some extreme heat. We shall see…

     The short-term charts are much safer looking than they were just a week ago. Technically there is no strong buy signal, only a contra-trend pop driven by some sensible trimming of massive historical short-sold positions by trading funds. Against-the-trend rallies are fickle, often sharp and violent, with no easily evaluated time frame. Now is the time for that black swan to settle onto the pond!

     There is an opportunity now to make incremental sales to capture some of the recent run. The big trendline is still negative, but the Chicago daily charts shows the current price right on top of the 60-day moving average we call the “Box-o-Rox” indicator. The next couple of days should resolve the froth and give a better picture, meanwhile remain skeptical!

Stay tuned.

Market Bullets® Tuesday, May 20, 2025: Close

     There was short-covering in the market Tuesday. You can pick whatever reason that seems best to you…a 2% slip in overall U.S. winter wheat crop conditions, a slightly weaker U.S. Dollar Index, “excessive” moisture on some winter wheat and some corn…None of these are powerful reasons to rally 12-20 cents across the wheat complex, including Paris milling wheat futures. The herd was on the move, probably trimming some of the edges of the massive net short-sold positions that had accumulated in futures across the board.

     Our Box-o-Rox indicator is now in “hold sales” status. A confirmation of that indictor is a trend-change factor. The trade will be inclined to view the surge in wheat prices with suspicion, since there is little in the way of fundamental or headline support. We are in the hands of the fund managers for the moment. At least it is positive in pattern.

Stay tuned.

Market Bullets® Tuesday, May 20, 2025: Dawn

     Memorial Day, May 26th, 2025 is a a day to honor and mourn those who died in U.S. military service. Many families take the day to remember honored ancestors.

      Wheat futures trading (and most other U.S. domestic exchange-traded contracts) will be closed. Trading will resume Tuesday morning.

     Excessive moisture in wide midwestern and southeastern corn and wheat states are triggering talk of potential quality issues. In the past, “rain makes grain” has been the conclusion of similar periods of heavy moisture. Russian winter wheat areas have also received measurable rains. The next weather phase will be heat, then we will measure some of the crop issues. For the moment, the stress on the U.S. winter wheat and corn crops is under observation, providing only a little support (not a rally force) for wheat prices.

     USDA’s National Ag Statistics Service (NASS) Winter wheat condition report in the PNW states as of May 18th showed a gain overall, with WA at 78% Good-to-Excellent (GeX), unch on the week. OR showed 61% GeX, +4%, while ID put up 70%, +8%.

     Oklahoma, a Hard Red Winter production state, was at 42% Gex in the April 6th condition report, but this week showed 56% GeX. TX has gone from 26% up to 32% GeX, KS dropped from 51% to 49% this week, while NE has suffered a sharp drop from 37% to 28%. The bag is mixed, but overall improved condition for HRW.

     The overall winter wheat rating for U.S. winter wheat was spotted at 52% GeX, -2% versus last year’s 49%.

     The wheat charts are showing a little bit of life, as Tuesday’s early AM trade has Chicago Soft Red Winter (SRW) up about a dime at 4:11 AM Pacific Daylight Time (UTC-7). KC HRW was up 11, and Minneapolis HRS was 6-7 cents. Paris 11% dry milling wheat was indicating 6-7 cents per bushel equivalent.

Chicago’s front futures month (July) is trading within a dime of the Box-o-Rox 60-day indicator, the first time it has been within striking distance of a “hold sales” status, not yet a trend, but at least a sign of life. The only tangible price-positive factors on the table are “potential” quality damage in SRW and some HRW states, and a global market that is functioning without heavy Russian wheat sales activity.

      Can’t yet call any uptrend, but we have to start somewhere!

Stay tuned for more.

No surprises from USDA’s Economic Research Service (ERS) in Wheat Outlook May 2025 (released on May 14):

HRW production in the new marketing year is forecast at 784 million bushels, up 2 percent from the previous year, with higher yield more than offsetting smaller area harvested.

SRW production is forecast up 1 percent to 345 million bushels, with higher yield more than offsetting lower area harvested.

White Winter production is forecast at 253 million bushels, up 7 percent from last year.

Durum and Other Spring Wheat production in 2025/26 are collectively estimated at 539 million bushels, down 13 percent from the previous year.

The new-crop season average farm price is projected to be 20 cents lower at $5.30 versus $5.50 for the current marketing year ending on May 31.

The above stats are just a reminder that we must assume we will be marketing with smaller price rally targets.

China has import quotas for corn and wheat. U.S. corn imports within the quotas are currently 26%, which is true for wheat as well. However, U.S. corn and wheat imported above the quota faces a tariff of 90%.

SovEcon estimated May Russian grain exports at 1.8 MMT, down from 2.4 MMT in April and 5.5 MMT a year ago, with wheat at 1.8 MMT this month, down from 2.4 MMT in April and 4.4 MMT last May.

Market Bullets® Monday, May 19, 2025: Pre-Dawn

     There are some indications of Australian crop drought – According to Clear Grain Exchange, an Australian grain order matching program, “Dry conditions remain in many areas and domestic end-users are bidding up to match grower target prices.” https://www.cleargrain.com.au/

     Solid data on Russian wheat production in the upcoming northern hemisphere harvest season remains elusive. There are some reporting a winter wheat crop in “good and satisfactory” condition although the sources are subject to question, while others point at the poor condition of last fall’s winter wheat crop emergence, with some sources now suggesting the crop is in its worst shape in decades.

     The statistical trend is for “big crops to get bigger”, an old wheat market aphorism. The crop size is still quite a ways from being “made”, but the general health of the northern hemisphere crop seems to be OK, which tends to keep a lid on rallies.

     The “street” is beginning to talk about buying wheat. Still scattered, but looking to buy at some point. If the wheat market gets a hint of China buying, or of virtually any net positive wheat factor increasing, it may light up the funds, triggering a short-covering pop, which may very quickly define a longer-term seasonal low. There is reason to be patient, but prepared to adjust. With the massive net shorts in the hands of the funds in Chicago and KC, it would not take much.

     Next change in weather to anticipate is an increase in heat…Duh!

This is trackable. Let’s track it!

Market Bullets® Friday, May 16, 2025: Dawn

Diesel prices pulling back, now trading $2.08 per gallon for a 40,000 gallon contract delivered NY Harbor.

On day two of the Kansas Wheat Quality Tour, scouts estimated yields in southwest Kansas at 53.3 bushels per acre, up from 42.4 last year and well above the 42.3 average. The Tour concluded on Thursday, with the average for the tour at 53 bushel per acre, a 4 year high for the Tour.  

No changes in trend or dominant factors this week. The wheat market is moving physical wheat at a pace and volume that addresses the needs of anyone who needs wheat. There are bargain hunters attempting to buy wheat at the low of the year without knowing if it is indeed the low.

In the long history of wheat speculation, this meets the criteria of a significant point in price movement patterns. If unlimited capital is available to meet margin calls, this looks like a place to buy some wheat, but that success of the cumulative position strategy depends on always being able to buy more, a condition that screens out most of us.

The overall bullishness of the macro markets seems about to grow. That may be enough to allow wheat prices to give us one or several marketable rallies, but harvest is likely to keep the brakes on the price.

Steady as she goes, helmsman!

Market Bullets® Thursday, May 15, 2025: Pre-Dawn

     Trump was being polite when he accepted the plane from Qatar. It was not given to him, it was gifted to the U.S. It is also highly unlikely that it will ever be used for presidential transport, as there are many other purposes for which it can be used. It is considered an insult not to accept such a gift in many cultures, and particularly in the Middle East.

     The wheat market is about as dull as it ever gets. When is the best time to buy anything?..When no-one seems to care, as it just looks stupid.  

     The long-term technical downside potential for wheat from current trading at $5.22 is about -$.50 to -$1.36, between $4.71-$3.86 per bushel in the lead Chicago contract. That range is a match for the lows during 2016-2020 on that long-term monthly chart. Bearing in mind that there is Always one or more downside targets visible, most of which never come to pass. The confluence of events and fundamentals that would lead to that kind of decline from the current price is not impossible. What were we doing in 2016-2020? What is our real breakeven price per bushel? How much has it increased since those years? Can we reduce that BE? What are my options for marketing at this level, e.g. loan, sell flat price and wait for buy signal to re-buy, hedge to arrive, option spreads…some of these may require the support of your financial institution. The wheat market will bounce. It always does. Could it be another year or more? Yes. Having at least the outline of a plan for marketing in that environment could save a lot of stress and hassle.

     Now the long-term upside, even if it seems far away. Using the lowest of those nasty low-end targets as a base, the first natural upward retracement for Chicago front month wheat contracts is about $7.22, about $2.00/bushel above today’s market. The challenge between is about $6.17 (the high printed a year ago), about +$.95. There are more above that, but the $1.00-$2.00 target will do to go on with.

     So, trying to be conservative about the measurement we are looking at a range of -$1.50 downside to +$2.00 upside potentially over the next 1-2 years. It’s a broad brush. Making trading decisions using monthly charts is a challenge, but it is a good planning tool. Being thoughtfully prepared for possible adjustments in operations and marketing strategies is worth its weight in sleep.

     We have not failed yet. The market is still honoring those heavy pysch lines, like $5.00 for example. It is entirely possible that the price of wheat will climb enough to make good opportunities for sales this season, but those captures will require regular monitoring of the patterns and tone…and a plan.  

It’s trackable. Let’s track it!      

Market Bullets® Wednesday, May 14, 2025: Pre-Dawn

     First test passed! Chicago wheat managed to close well above its long-term lows on Tuesday, bouncing 11 cents to close positive, but that may be the only candle in the window. There are no fundamental issues anywhere large enough to move wheat prices up more than a few cents.

     It is a curious circumstance in which USDA has projected average corn yields at 181 Bu/acre, when that total has never been hit before. Calculators across the corn belt are showing that it will take near perfect weather to achieve this yield, which puts the USDA in the odd position of forecasting the weather based on projected corn yield. It seems that market behavior will ebb and flow with each week’s weather, and the seriously sensitive period has yet to begin.

     The tariff parade is marching in place, halted at the corner of main and Who’s on First to play the national anthems of both China and the U.S. for your entertainment. At least the corn-dog man is making sales and the pom-pom girls are handing out “Made in China” kazoos as fast as they can. It’s a great time to be alive!

     This market will provide some opportunities for wheat marketing, but they will likely be rapid and discontinuous. The rules have not changed. The Box-o-Rox Indicator has a bright “continue to make incremental sales” light on the board. The trend is negative since the breakdown of the last 6-months sideways channel, back at $5.25 in Chicago July futures, but the price is low enough now that cash sales from the country are slow, with producers suffering from FOMO (Fear of Missing Out) based on what really appears to be a chart low with rally to follow. Normal seasonal volatility will be pure torture to anyone with exposed wheat in the bin. Don’t let the whipsaw getcha!

     Make the sales on schedule. Prepare any appropriate speculative re-buy tactics in advance, but keep the safety on until there is something rational with which to trigger them. There is going to be lots of wheat for sale in July through September.

Stay tuned.  

Market Bullets® Tuesday, May 13, 2025: Pre-Dawn

     The World Ag Supply/Demand Estimates (WASDE) on Monday were not friendly for wheat, as the new crop production estimate was advanced 1.921 billion bushels, stronger than the average pre-report guess. Global wheat ending stocks were increased slightly to 265.21 million metric tonnes, a 4.51 million tonne, +1.71% rise. There were no price-positive stats in the wheat package.   

     The winter wheat Crop Condition reports showed the U.S. 18-State average condition at 54%, +1 from last week. WA winter wheat tallied 78% Good-to-Excellent (GEx), unch from last week, and OR is dropped 6% to 57% GEx. ID shows 62% GEx, down 3% from last week. The winter wheat crop condition improvement over the last month accounts for much of the change in production that showed in the WASDE.

     You don’t have to be undefeated to win the Superbowl (One (1) team – the Miami Dolphins in 1972 had a 17-game perfect season – Larry Csonka, what a beast!). The same goes for the World Series – No World Series winner has ever been undefeated in the Major League Baseball season. In 86 years of the NCAA Basketball Division Championship, only seven NCAA teams have completed an undefeated season and then taken the trophy. No NBA team has had a perfect season going into the Championship.

     Wheat marketing or trading is a job of probabilities. Trading in the direction of an established trend is undeniably the best way to increase the odds of profitable decisions, just as trading against the trend is a powerful way to decrease the chances of success. Holding wheat in the bin against the trend is a very risky and expensive way to speculate. It is far better to limit cash wheat exposure by liquidation or other explicit coverage through a planned incremental liquidation or directly applied hedge strategies, and then to use the “paper” markets to re-enter the market if speculation is appropriate given financial strength and operator knowledge.

     We are now perilously near multi-year, long-term lows in wheat prices. If the current downward trend is strong enough to penetrate and confirm new lows, the ability to measure market risk becomes profoundly more difficult…except for merely following the trend, while avoiding holding or extending ownership against the trend. Harvest is coming, trend or no trend, making wheat producers inherently “long” wheat into the future. The job of selling that production is one of controlling exposure; being slow to sell in an uptrend, and quick to sell in a downtrend (the exact opposite behavior from what most ordinary mortals seem wired to do).

     There is but one choice for the producer: to sell or not to sell.

     Tuesday early AM trade (4:00 AM Pacific Daylight Time (UTC-7) had Chicago wheat down 8 cents, within 3 cents of its recent long-term low on April 29 at $5.05. The next key low is at $4.93 dating back to mid-August of 2020, 4 years and 7 months ago. The downward roll is gaining momentum, having defeated the 6-month-old sideways range lows that had held since last November, even though the funds are near all-time large net short-sold positions in Chicago and KC. The market tone is one of capitulation among long-standing holders of long wheat positions. A confirmation of penetration below $4.93 on a closing basis (multiple session closing settlements below that price) will stimulate sellers and discourage buyers, a recipe for lower lows. Every low has the potential to be “The Low”, but the only way to credibly identify that low is after the fact. The overwhelming propensity is for new lows to be followed by more new lows. When a trend is as old and powerful at the one now driving the market, it takes time and consolidation to create the conditions for a new upward trend to emerge.

     It costs 3-5 cents or more per month in storage, interest and opportunity costs to keep wheat in the bin. Six months of storage cost at least $.18 to $.30 per bushel. A year is $.36 to $.60, a honking big hit to have to overcome just to break even.

     Cutting your exposure, even incrementally over time, in both old and new crop is never a bad policy, and during a wicked downward price trend, it is essential! Buy it back when the worm turns if you must speculate, but speculating with stored wheat can be spectacularly expensive. Use the alternatives to physical ownership, but only when the trend conditions are in your favor! Call your merchant. Make a detailed plan for this tactical set. Doing so will reduce stress and clarify your actions later.

The market is testing low prices, and our psych. Let’s track it and act on that.          

Market Bullets® Friday, May 9, 2025: Weekly Close & Early Monday Perspective

     Chicago July wheat futures dropped 9 cents in the first 90 minutes of trade in Friday’s day-session. If you must have a reason for that; “There were more sellers than buyers.” Good wheat moisture in the winter wheat states? Yes. Good corn seeding progress for the week and good moisture to with it? Yes. Indication of Russian problems with their wheat crop? None. KC Hard Red Winter (HRW) wheat at new 4.6-year low? Yup.

     Even though Paris Milling wheat futures hit a new daily low -€.25 per metric tonne (less than $.01 cent per bushel) below the last 5-day series lows, it counts as a quad low, kinda rare as patterns go. The contract finished the day up from that low, forcing us to apply confirmation bias to declare a bottom pattern. Can you buy this? I would not, but there are some who will. The market is clearly seeking to build a little chart base, but it’s at the wrong end of harvest season without some supply problem on which to hang a hat. That makes two major global milling wheat pricing sources (KC and Paris) that have very negative implications in their charts over the last couple of weeks, mostly based on significant improvements in growing conditions, leaving us with almost nothing upon which to lean for a fundamental price support concept in wheat.  

     For Paris milling wheat, a purely technical, upward reaction in proportion to the magnitude of the decline from February to current calculates to a 1st retracement upward target around €223.75, up €21 per metric tonne from Friday’s €202.75 close in Paris. The potential downside is open to €196 - €176 per tonne, last traded in 2020-21.

     For KC Hard Red Winter (HRW) that same calculation is about $5.61 (+$.44 above current), with a long-term downside between but there is no buy signal on the charts.

     Those who cannot resist buying here may end up looking like a genius, or NOT. We have never found the contra-trend, bottom picking style of trading to be anywhere near viable. It’s too much like flipping a coin. It is far better to give up some of the upside to confirm a change in trend before adding market risk, but even then, on any first upward shot from long-term lows, it’s contra-trend and high-hazard. Patience, Precious! Wait for at least a 1-2-3 reversal pattern or crossover or anything but guts!

     We start out the week with Chicago wheat trading unchanged at 5:00 AM Monday. KC Hard Red Winter (HRW) wheat futures up 2, MPLS Hard Red Spring (HRS) down 2 as Paris 11% milling wheat indicated a positive 6 cents per bushel.

Some relief for the wider markets as negotiators agreed on a 90-day cooling period for China and U.S. tariffs. Engagement here is the key. There should be some expectations for gains on both sides and a setting up of later actions. Meanwhile, the world markets will continue as usual. In the wheat arena there are open doors for more trade, whether that is token purchases by China or a better focus on other issues. On the whole, the environment is stable for now.

     The trend is sideways. Let’s watch the channel boundaries for signals.

Stay tuned.

Market Bullets® Friday, May 9, 2025: Pre-Dawn

Diesel is moving upward

Hard Red Spring (HRS) in Minneapolis was +1¼ @ 4:00 AM PDT, Chicago July was up 3 1/2, KC plus 1 1/4 and Paris was indicating plus 7-cents equivalent in milling wheat prices. Friday will likely start as a positive session.

     The U.S. Dollar Index is slightly stronger for the first week since late February. Not a trend-change signal, but at least a pause in a decline since the first of the year. The Yuan is not included in the calculation of the Dollar Index, but it, too, is slightly weaker against the USD. This is a very mild wheat price negative factor, but in the present context it is more of a signal of a change in the global economic weather, which had been clouding up.

     10-year Treasury Notes are showing rising rates approaching long-term highs last seen in September of 2023. 2-Year Notes have seen rising rates since the first week of April. This is an underlying factor in the increase in U.S. Dollar value, especially in the absence of inflationary pressure, which allows real interest rates (T-Bill rates minus inflation minus taxes) to be positive and internationally competitive, which in turn leads to a stronger demand for the greenback.

     Paris Milling wheat on Thursday matched a low price that has repeated at the low in 3 of the last 4 sessions. The low dates back to April of 2024. Short-term traders sometime see this as a “triple bottom” pattern. We will know shortly if they are right to do so. Paris is a clear representative price of most of Europe and includes influence by Black Sea wheat. It is presently weaker than the wheat contracts on the three major futures exchanges in the U.S.

     Stay tuned here for tracking of the trend. Changes will show in the charts before they are verified by fundamentals.

     Monday’s WASDE report from USDA, WASDE will show revised 2025/26 balance sheets. Analysts expect to see old-crop wheat at 850 million bushels, approx. a .05% increase. New-crop is guessed at 863 million bushels. 2025 U.S. corn production is guessed at 15.787 billion bushels, assuming average yields of 181.1 bushels per acre.

     Chinese President Xi arrived in Moscow on Wednesday ahead of Russia’s Victory Day parade on Friday, Russian President Putin regards the Chinese president as Russia's "main guest". Discussions of trade and the future of the BRICS trading bloc are expected to be ongoing between the two leaders.

     Russian wheat crop condition data are mixed. There are still wide areas of Russian wheat production that remain short of moisture, but a consensus is forming that there is not a crop disaster looming, as has been projected by many market participants. In the last 45 years, winterkill of wheat has been projected to be a serious problem for regional wheat markets several times, but has never fulfilled the dark projections. Wheat is tough, and with any decent moisture can recover from extreme winter weather problems.

     If the weather threats to northern hemisphere wheat production that have sustained the hopes of many marketers and traders for a rally this spring turn out to be of little concern, then what is there that could fuel an early summer price runup? There are some technical patterns that may grant a consolation prize, the most obvious is the well tested and sustained sideways channel some call a “base” that has accumulated over the last . The largest visible factor is the historically heavy net short-sold positions in the hands of the big money trading funds. Improving international trade communications and expanding demand are clearly possible dimensions of the summer marketing season.    

     There is reason to sell incrementally over time, but with strict observance of the low side of the long sideways channel as a sell signal. It is reasonable to hold for a failure of that line. Alongside of this idea, a well-prepared re-buy plan to replace sold wheat using various option strategies or other tools is an option for some. Bear in mind that this represents increased price risk exposure and is not for everyone. Don’t test your marriage! Communicate! Apply non-impulsively on pre-defined criteria only.

Market Bullets® Thursday, May 8, 2025: Pre-Dawn

     Current Old-crop U.S. wheat sales year-to-date are at 96% of total projected. The World Ag Supply/Demand Estimates coming out on Monday morning, May 12th will be tightened up as we come into the last 54 calendar days of the crop-year ending June 30th. New-crop wheat export sales (2025-26) are running 19% ahead of the previous year.   

     If China needs wheat in the new crop year and they choose to buy it from other sources, it will still shift the global supply/demand balance and likely improve prices overall. If they do not need wheat, the impact of any tariffs on wheat trade with China will be nearly imperceptible. 

     Looking down the long-term road, there is no way to avoid the wheat production acreage increase that is likely to emerge from any cease-fire in Ukraine. Both Russia and Ukraine will strive to increase wheat exports in the foreseeable future, and both will be price-setters for most of Eurasia and the global south. The structure and practices of global wheat trade will likely shift in response to the BRICs plan to establish a new global exchange, although it may be a while before their new exchange is fully established. Many things may change before then. An October 2024 article by the Council on Foreign Relations summarizes the broad outlines of the emerging pattern of global wheat trade. https://www.cfr.org/blog/why-expanded-brics-backing-russia-initiated-grain-exchange   

BRICS Nations:

·         Original Members: Brazil, Russia, India, China, South Africa 

·         New Members (2024): Egypt, Ethiopia, Iran, United Arab Emirates (UAE) 

·         Other Interested/Partner Countries: Saudi Arabia, Indonesia, Argentina (initially invited, but later declined), and others 

       The expanded BRICS nations could represent around 33% of global wheat exports. The BRICS and expanded BRICS nations represent a significant portion of global wheat demand, potentially between 40% and 47% of global wheat consumption. This organization is no joke. If we intend to be aware of the global wheat markets (and more), it makes sense to allocate a little time toward monitoring what the BRICS Boys are up to. Additional reading <here>.

https://www.investopedia.com/brics-etfs-pros-and-cons-8548466

     The big picture for wheat demand is shifting. Tracking the developments of this potentially very influential global entity will be essential. For example: “BRICs Chain” crypto currency values and validity.  

Meanwhile, back at the ranch…Chicago wheat futures at 3:00 AM PDT Thursday morning May 8th were trading up 3½ cents at $5.36, KC was +4½, MPLS up 4 and Paris 11% Milling up 1½ cents per bushel equivalent. The market is presently set in “hide and watch” mode, for new WASDE numbers and for tariff “deals”, so a narrow range and a few quick moves based on incremental money fund movements is what we must expect. This is the time to be paying some attention, with the charts hovering too near long-term lows for comfort, as a failure to hold above the sensitive $5.05 to $4.93 low in our bellwether market, Chicago Soft Red Winter (SRW) wheat futures.

     The trend is sideways in a well-defined channel. There are reasons to be patient, but the “make sales on schedule” light is still lit on the Box-o-Rox chart.

Stay on track. Stay on plan. Watch the charts.         

Market Bullets® Wednesday, May 7, 2025: Pre-Dawn

     Chicago Wheat futures are bumping up to the 38.2% retrace line, a familiar ratio level that represents a minimum bounce back toward highs. Current trading is 66 cents below February’s 2025 most recent highs.  

     Russia's IKAR has raised their wheat production expectations from 82.5 million metric tonnes to 83.8 million. Every day passing now is critical for northern hemisphere wheat crop development (including Russia and China), but soon we will begin to taper the risk of crop damage, as the first trucks will cross the scales in the southern U.S. within 2-3 weeks. 39% of the U.S. winter wheat crop is now headed.

     The pattern of wheat prices is not deviating . The sideways channel remains intact. Watch for breakouts. Sell incremental amounts on schedule. Prepare potential re-buy strategies, just don’t execute them without solid favorable trend ID.

     It’s redundant, but monitoring the pattern is the most efficient approach to go/no-go decisions in this environment. Stay tuned.  

Market Bullets® Tuesday, May 6, 2025: Pre-Dawn

     Here comes gold (again). The June Gold futures contract, now the “front” month, were up $66 per Troy ounce in early morning trade on Tuesday. The price of gold had been in “correction” mode, pulling back about $300/oz from April 22 to May 1. The powerful series of new all-time highs that began in November 2022 had pushed gold up $1,891 per ounce. The trading environment has been one of agitation, emerging global conflict and rising fear. The amount of capital that has moved into gold is enormous and likely has included large central bank activities with regard to reserves, especially in the light of threats to the Petro-Dollar. As an indicator of anxiety and anticipation of trouble, the recent behavior of gold seems to be a loud and clear statement of lack of confidence in fiat currencies.

USDA’s weekly wheat crop condition report shows the 18-state average condition as 51%

Good-to-Excellent (GEx), an improvement of 2% over last week.

     PNW winter wheat crop conditions show WA at 78% GEx, +3%, OR 66% +8% and ID 65% -7%.

     TX 31% +1%, OK 48% + 4%, NE 33% unch. Montana saw a 9% jump in winter wheat crop health at 79% GEx.

     Taiwan tendered for 99,000 metric tonnes of U.S. milling wheat Monday, for delivery July-Aug.

     The next World Ag Supply/Demand Estimates (WASDE) report will me Monday May 12, 9:00 AM Pacific Daylight Time (UTC-7), 11:00 AM Central. The May report is one of the more potentially volatile events of the reporting cycle, although there is no obvious emerging stress-point on the markets going into the report, which will include the first domestic and global supply and demand balance sheets for the new marketing year. The wild card, if there is one, is still Russian wheat production doubts. So far, there has been no indication or announcements suggesting significant problems with their wheat crop condition.  

     The trading pattern of wheat has not changed. There seems to be just enough buying to prevent a very strong downward movement, but nowhere near enough to create a breakout to the upside, with early northern harvest less than a month away.

The trend, if we must identify one, is flat, as Chicago is trading at about the same price zone as September of 2023. For marketers of wheat, the pattern is going to be valuable as a measuring tool for detection of a change in price behavior at some point, with a break to one side or the other. Incremental sales still make sense, but with a stand-by re-purchase plan to be executed only when there is an actual positive price signal.  This approach is not for everyone, as it involves re-establishing some controlled amount of price risk, but the logic is sound. Call your merchant to review what that strategy might be.

It's trackable. Let’s track it!  

Market Bullets® Monday, May 5, 2025: Previous Week Closing Comment

     Monday’s after-midnight trade is quiet, with wheat’s range a cent or two on each side of unch and some hints of positive economic news. Chicago at 3:00 AM is -1 cent, KC -2½ and MPLS HRS up 3. Paris 11% milling wheat is indicating 9-10 cents per bushel equivalent lower.   

     China and the U.S. are moving closer to face-to-face work on tariffs. The pattern among many nations of serious negotiations following a belligerent initial reaction is becoming more common. The markets are telling us that there is no heavy damage to-date from tariff pressures. Some significant spending decisions are being delayed until the tariff parade has passed, so there is likely to be a surge of many categories of buying once the economic balance is more visible.  

     Gold is up Monday in after-midnight trade at $3,306, a recovery from last week’s lows at $3,209, which were about 8.5% below the all-time high on April 22 of $3,509. The market is functioning normally.

     Crude oil has broken out of a long-term pattern that creates a technical target around $36 (!). OPEC has announced a significant production quota increase, apparently to stop shale drilling from being profitable in the north American continent and to squeeze Kazakhstan, the most prominent OPEC member to ignore agreed limits on production. While this seems to be  extreme, it would not be the first time that OPEC has stepped up production to achieve some market limiting objectives.  Diesel prices in the U.S. have continued to build a negative-sloped chart pattern that started last January at $2.64 NY Harbor and is presently pushing toward long-term lows around $1.98 per gallon. The trend there is still to the downside, but it is a “mature” move, so it has to be watched carefully if we plan to take advantage and fill up. We will probably fill our heating oil tank soon on that basis.

     Wheat prices are still lingering near long-term lows, without much conviction. The trading range remains about 40-50 cents wide, with a high end at near $5.69 Chicago July futures and a low $5.28. There is a major long-term low at $5.05 that was established by the May futures contract during it last week of trading before entering delivery and expiration. It would strengthen the charts considerably if Chicago July futures was able to at least challenge the $5.69 upper boundary, which would create a new, higher high point on the recent cycle.

     There is still talk of Russian crop stress bubbling quietly on the back trade burners, with little confirmation. It will be a while yet before this solidifies.

     The large speculative funds are now holding the largest historical net short-sold position in Chicago futures except for one brief period in 2017. This is worth following. Please see the COT chart that illustrates this pattern <here>.

     Stay tuned. At least it is interesting.

Market Bullets® Friday, May 2, 2025: Close

6:23 AM Friday – Chicago wheat is up 11 cents, appeared to be profit-taking. At the end of the session, July was up 12. KC up 13½, MPLS up 17 and Paris 11% Milling was up about 4 cents/bu equivalent. The week    

Market Bullets® Thursday, May 1, 2025: Pre-Dawn

     When the futures market moves from one contract to another, it can create some chart anomalies that seem disruptive. The May wheat futures contracts in Chicago are expiring within a couple of weeks and have entered their delivery period, during which holders of short-sold contracts can “assign delivery” to long-bought holders until the contract ends. during this time, all holders of long-bought contracts that have not offset their position by selling it to someone else are assured of receiving 5,000 bushels of #2 or better Soft Red Winter (SRW) wheat per contract in the form of an ownership certificate for wheat located in any of the various designated elevators. They will then be paying storage if they wish to keep it, or they can load it out, incurring a “lift fee” charged by the elevator operator. This is an activity that is usually confined to a few merchandisers that have reason to take ownership of the wheat, along with the occasional hapless individual trader who did not listen his broker. There is no wheat truck that pulls up in front of the trader’s house and asks his wife, “Where do you want this wheat dumped, lady?”

     Meanwhile, the futures trade moves on to the next deferred contract which in today’s case is trading at a higher price due to the cost of carrying the wheat, storage and interest into the next delivery period.

     It makes the continuous front month chart look like there was a rally when there was none. All other things being equal, the corresponding cash prices around the country are the same as they were the day before, as the “basis” is changed to maintain the market quotes. It happens every time there is a futures contract expiration, some spreads having more and some less on the chart pattern. There is no other way to express the ongoing front-month price. In this way, the futures contract prices are welded to reality…real wheat that is.

     One factor that is a relief to technical front-month chart followers this week it that the lead month contract is now quite a few cents above the deadly “support” zone that has been under attack. Without a signal trip wire, the market will relax until it either fails again or creates another pattern that leads to a different trend identification. By this point in time, the vast majority of money fund traders and small specs have moved to the July contract already.  

     The funds did take some profits on Wednesday, which helped take the downward stress off somewhat. Now we will continue the same story that we have been constructing for many weeks and months. July is a real “new crop” contract for many. The crop looks healthier that it has been for weeks, and there are other wheat sellers in the global markets. The bottom line is that there is no bullish story consensus to lean on, so the same marketing refrain applies; make your incremental sales as scheduled. There is no buy signal.  If your personal risk profile allows it, a decent idea is to prepare a re-buy strategy if we discover that there was a black swan swimming around on the pond the whole time and the market turns upward, but buying before there is an uptrend structure identified is risky.    

Market Bullets® Wednesday, April 30, 2025: Pre-Dawn

     A very thoughtful article written by Karen Brown of Reuters was released on April 24th through UkAgroConsult. It is worth the time to read. “Two months ago, USDA forecasts showed that world wheat stocks-to-use (SU) among major exporting countries would reach a 17-year low of 14.56% in 2024-25, but this month’s update shows the figure at 15.89%, the second-highest in six years. That’s largely due to sharp declines in China’s wheat import estimates over the past three months.”

     Per the most recent USDA report, marketing-year-to-date wheat export shipments total 19.46 million metric tonnes (714.9 million bushels), up 15% from the same period in 2023/24. USDA’s current projection is for a 16% year-over-year export increase.

     U.S. Corn producers managed to get the drills into the field enough to make a big advance in planting progress last week, even with widespread rains across the Midwest. USDA reported on Monday that the crop was 24% planted as of April 27th, up from 12% last week and better than the 22% five-year average. “Rain makes grain!” It seems unlikely that Wheat will find much sympathetic support from the sister grain under this setup. December corn futures have declined 26 cents since mid-April highs and are now looking down the barrel of a strong crop.

     The wheat market is sagging, but there is trade talk of bargain hunters watching very closely. The calendar-month-end trade may prod the money funds into some profit-taking action on Wednesday, as there is a tempting little pile of short-sold cash on the table. If they don’t bite that bait, the message is that they believe there is more downside potential. When the trend is down, as the current wheat chart shows, the buy signal if there is one is mostly short-term in nature. Contra-trend profit-taking bounces without solid foundational reasons to rally can be vicious. It is not a good trade for small accounts.

     Prudence says to go ahead and sell planned incremental amounts of cash wheat, but prepare for a re-buy scenario to be applied only when a proper buy signal emerges. The temptation to buy “cheap” wheat because it’s cheap can be very strong, but picking a low is rarely a good strategy. Some might call it, “catching a falling knife.” If it works, you are a genius for a few moments, but new lows are likely to be followed by more new lows, quickly turning you into the opposite of a genius… (speaks from experience).

     Stay tuned, there is a lot more coming.       

Market Bullets® Tuesday, April 29, 2025: Pre-Dawn

     The wheat market is showing weakness, but volume of trade has tapered off by half from the surge of interest that showed between March 28 and April 11, during the recent positive 40-cent price runup. Open Interest (the sum of all outstanding contracts held by all traders in Chicago wheat) has also declined by some 32.000 contracts during the negative move from April 11 on. This is a moderate sign of non-confirmation of the downward move, although it does not indicate whether that move is completed yet.

     Early Tuesday morning trade had Chicago at plus 1-2 cents, KC down 1 cent, Minneapolis HRS up 2 and Paris 11% Milling wheat up 1-2 cents per bushel equivalent. The tone of the complex is relaxed and slow.

     The wheat market knows it can buy as much wheat as it needs to without straining at the present price, although the producers across the spectrum are all holding back as much as possible at present, helping to keep a bit of price support present.

     The sharp losses in the wheat markets that put prices at or just below the long-term support zone (where buyers had reliably been found over the last several months) ended Mondays session with a lift from session lows and a close very near the various support lines that we have relied on for such a long time. This is no kind of idea that the downward tendency is over, but it is an acknowledgement by the market that the line does exist.

     FranceAgriMer (similar to USDA) reports quality ratings for the 2024/25 French soft wheat crop were down by 1%, at 74% good-to-excellent condition through April 21. Last year ratings were at 63% at this point. France, the largest producer of wheat among the EU nations, had a very bad wheat production season for wheat last year, and is expected to bounce back toward “normal”.

In the U.S., wide-spread and timely moisture is covering millions of acres of grains, including wheat stands that had been suffering from drought until this week. There are some western states that remain under stress, but the picture no longer has a straight consensus of drought.

     The USDA Crop Condition Report out Monday afternoon shows PNW winter wheat at: WA 75% Good-to-Excellent (GEx) up 6%, OR 58% GEx up 2%, and ID 72% up 2%.

     The overall 18-state average for U.S. winter wheat came at 49% GEx, up 4%. Last year at this point it was also 49%. The anticipation of this improvement was likely the driver of the negative price move on Monday (before the Crop Condition report was released).

     TX jumped up 4% to 31% GEx and Nebraska gained 3% to 33%. Overall a solidly improved U.S. winter wheat crop.

     There is no buy signal, just less expensive wheat. Most of the downside risk of owning wheat has been drained out, leaving a low energy market that must wait for something to happen. There are traders bargain hunting, but that group is rarely large enough to do much heavy lifting. Mostly they are part of the support line.

     Stay tuned, there is room for a bounce, even if it is a simple profit-taking run. The character of the move will allow a peek into the underlying strength of this market. There is still downside potential. (There is always more potential in the direction of a well-established downtrend).

Stay tuned, Stay on plan.  

Market Bullets® Monday, April 28, 2025: AM

As of 9:30 AM: Minneapolis Hard Red Spring (HRS) down 9½ to $581.75.  Paris 11% Milling Wheat down about 8 cents/bu equivalent (-2.75 Euro per metric tonne). Relevant charts will update at end-of-day.

Lots of moisture on wide dry areas of U.S. wheat. The early chapters of this year’s spring weather story is unfolding as one of relative abundance of wheat.

More after the close.

Market Bullets® Monday, April 28, 2025: Pre-Dawn

     Monday morning’s Chicago July wheat futures contract gapped down just ¾-cent on the Sunday evening trade opening and never looked back, heading south on a 45 degree angle, down 9 cents at 2:10 AM Monday morning Pacific Time (UTC-7). Fundamentally speaking, it is not a remarkable action, but technically it’s a little like watching a drunk dancing on the edge of a balcony railing.

     The market seems unable to find a problem with the emerging crop, with decent moisture entering some of the more rain-needy southwestern Hard Red Winter (HRW) wheat states and no sign of Russian wheat crop issues.     

     Reminders from USDA: Total U.S. commitments (the sum of accumulated exports and outstanding sales) are 21.2 million metric tons as of March 27, up 13 percent from the same time last year (using week 43 as the basis for comparison, which compares to March 21, 2024). The forecast U.S. export total for 2024/25 is still a 4-year high and up 16 percent from the 52-year low observed in 2023/24. U.S. wheat production was much larger this year, while key competitors Russia and the European Union had much smaller crops. However, reduced global import demand limited the year-to-year increase in U.S. exports.

     The big trading money Funds have accumulated a large short, but that is only a part of the whole picture. This is a factor that may end up being the key to the spring season market pattern. Please click here for a more detailed examination of the COT Report.

     This market is weak. It may dip below the long-established baseline on the charts. If it does, there is likely to be a rush of selling, a “capitulation” run that will be a big disappointment to many producers. It would not be the end of the story, but would project a longer time before a price recovery. Stay on plan. Make the incremental sales. There is more to come.

Stay tuned.

Market Bullets® Monday, April 28, 2025: Special

     Many articles about the wheat market allude to “The Money Funds”. There are large, mostly well-funded trading entities that accumulate positions in many different futures markets. Their presence has a magnitude in effect on price movements as large as the weather, or even the guvmint. They exist because they must in order for our markets to accommodate any size of business, from micro to macro. The discussion of the size and function of the futures markets, specifically the wheat markets, is well beyond the scope of this comment. At the moment the focus is on the character of these large creatures, which command so much capital in wheat.

     The “Money Funds” are a feature of the futures business, categorized and monitored by the Commodity Futures Trading Commission (CFTC) in a weekly report called the “Commitment of Traders” (COT). There are several categories of trader required to report their net positions every week to the CFTC. The two most prominent of these are the “Commercials” and the “Large Speculative” accounts known as “the Funds”. The public is not given the names and direct positions of each firm, but the aggregate numbers are published every week.

     The Funds are trend-followers and use every technique known to man to attempt to capitalize on the movement of wheat prices. They do not know or care about what wheat is made of unless it affects the price in some significant way. The “Commercials” are those familiar names that have been around the grain merchandizing business forever; Archer Daniels Midland (ADM), Cargill, Bunge, Ltd, Louis Dreyfus Co, and many others. Both Funds and Commercials continuously participate in the futures markets for different reasons.

     The Funds always speculate. They neither own nor handle any cash grain. They care only for price movements, trading futures as a money vehicle.  

     The Commercials are strictly involved in handling, buying, storing, selling and otherwise providing a channel through which vast amounts of grain move each year. Their interest in futures is to reduce their exposure to price movements. They do not speculate.

     Awareness of the COT report is essential for any marketer of wheat. When the Funds accumulate massive net positions, it usually the result of a long trend, during which they tend to add new positions along the way to build profit upon liquidation.

     The Commercials use the market in a very predictable pattern. They buy wheat futures when they make sales commitments for later delivery to protect them from upward price movements during the time it takes to acquire and move the wheat into position for delivery. Once that physical contract is acquired, they remove the futures position, as it no longer reduces risk for them. When they acquire wheat that has not already been committed to a contract for forward delivery, they sell futures to cover the risk of downward price movement until that wheat is contracted. This is a simplistic view of their participation in futures, but it is essentially what they do in those markets. They do not speculate.

     When the wheat price is moving downward, the Commercials tend to accumulate less physical wheat along the way, as producers become more and more reluctant to sell. This causes them to accumulate large net-purchased “long” positions to cover obligations for forward deliveries. An extended period of downward price movement may lead to a very large net long, and the group tends very strongly to reach their largest net longs at market lows. Ironically, this means that they are always “right” about the market direction, an astonishing thing until one realizes that it has nothing to do with speculative decisions. It is the nature of their business.

     Any trader can follow the positions of the Commercials and/or the Funds, but as a trading signal it may require vast amounts of capital to stay in positions like theirs, sometimes months or years. It is a very ponderous and imprecise indicator, but it is a great background piece of data.

     Today, the Commercials are carrying historically massive wheat positions, as in 91,745 contracts as of the most recent COT report, representing 458,725,000 bushels of wheat in Chicago, and 42,291 contracts (211,455,000 bushels) in Kansas City. This is a larger “net long” than at any time in the past except for three brief periods in 2016, 2017 and 2023, each followed by significant rallies of at least $1.00 per bushel.

     On the other side of the fence, we have the Big Specs, the Funds, holding a big 93,969 contracts on the short-sold side. This group, when properly ignited, tends to move quickly and can lift prices. It usually takes a hot wire bit of news or a USDA report to light them up, but when they stampede, it can be amazing.     

     We can use this data, but it’s sometimes like forecasting T-storms in summer, we know the conditions that give rise to them, we can plan for them, but we cannot mark the dates in advance on the calendar.  

     It looks like we may have a Funds VS Commercials rally approaching, even the occasional flash of lighting on the far horizon, but no thunder and no promises yet.

     Stay tuned, we will smell the storm coming.            

Market Bullets® Friday, April 25, 2025: Pre-Dawn

     Charts (and many funds) finish front month rollover from May to July contract tracking on Monday, April 28. Continuous charts will reflect a spread of about 14 cents per bushel higher on that day due to the “carrying charge” (the cost of storage and interest) to July deliveries. This is a normal market structure, but it creates a “Chart artifact” that appears to be a rally in price, but which in fact is not. Please call or text with questions.

     Germany’s farm cooperatives estimated 2025 wheat production at 21.41 MMT, up almost 16% from last season’s heavy-rain-reduced crop, and above their previous estimate of 21.36 MMT.

     Early trade Friday morning showed Chicago May Futures up about 4 cents heading into their last weekend before First Notice Day delivery begins on Monday. The new front month will be July, a true “new-crop” delivery month, as Soft Red Winter (SRW) wheat harvest begins to expand in May. The wheat market has spend a long and dreary spring to date hovering very near a well-established line of low prices that now present us with a “base” on the charts for the next significant move. When that price trend shift begins to emerge, it will be relatively simple to identify, as it will either break downward below the flat pattern it has been trading for many months, or it will begin to rise to challenge the upper side of the range, about $6.33 to $6.56 in the July futures, some 84-108 cents above the current market. (Please note the first paragraph above that attempts to illuminate the carrying charge effect on the charts).

     Prognostication is not a reliable weapon in the marketer’s arsenal, but we will venture to point out that there is actually a trend developing in the Trump administration’s efforts to recalibrate the global trade arena’s yard markers; if the negotiations begin to slow down, like listening to a microwave popcorn bag getting near completion, it seems clear that we will see a more reasonable environment begin to emerge. Many in the global wheat trade have apparently been slowing down transactions due to uncertainty of tariff settlements and other more political considerations. Once early harvest begins to claim the attention of merchandizers, buyers and shippers, it seems likely that we will experience a surge of wheat movement, accompanied by a price increase… That is a forecast, not a certainty, but a somewhat plausible scenario. This is not a good reason to interrupt a marketing plan, but only a reason to observe price movements and the “tone” of the hive closely.

     We will be tracking the trading funds and their still-heavy short-sold positions in the pre-harvest period. As of the last CFTC weekly report, Chicago “Large Speculative” traders have an aggregate -88,326 contracts sold. Historically that is a relatively big net position, one that could provide quite a bit of short-term price lift if something comes along that makes them believe that profits must be taken.

     It is raining in some of the thirsty Hard Red Winter (HRW) wheat plains states, even as the window begins to close on benefits from moisture. That has bothered the wheat traders that had been counting on a crop disaster in Texas, Oklahoma, Colorado and Nebraska. That seems to be fading. But it’s spring. The conditions can still shift very rapidly.  

     This market is capable of big things, with a downside that is limited by the fact that most cash wheat sellers that need to clean out storage ahead of harvest and pay bills have already taken some action to do so, and are unlikely to crowd the window if the market gets negative.

     It’s a good time to be aware of the daily market. Stay tuned here. We will see it.        

Market Bullets® Thursday, April 24, 2025: Pre-Dawn

     Tariff negotiations with China are dominating the wires and the minds of many market participants. China and the U.S. both have strong willed chief negotiators (Donald Trump vs Xi Jinping) and both leaders have reasonably strong public support. Of the two, Trump has more and louder critics, giving Xi some confidence that those critics will weaken Trump’s resolve eventually. The talks may take longer than some may hope, but both leaders also have good reasons not to waste time. Business daylight is burning. Everyone needs to get back to a focus on productive activities. There is a whiff of good in the wind, but no solid evidence yet. Perhaps some white smoke will come out of the chimney when they get to an agreement.

     There is still large, upward momentum in the gold futures contract. The hyperbolic trendline prevents simple chart tracking. The downside risks are considerable, with very rapid and unpredictable pullbacks, even though “normal” for a market with an intact uptrend, will be large enough to seriously damage a small account.

     The rain is on the plains. Even though the USDA trimmed 2% from the U.S. 18-state winter wheat crop condition in the last week, a very timely rain could make a very large difference in the middle tier of western Hard Red Winter (HRW) wheat states. The market is focused on this potential, but the Russians seem content with their stressed winter wheat crop as it stands. The hope of a powerful upward force emerging from desperation in the Russian winter wheat region is fading slightly. It is still early, and measuring losses from dry fall-cold and dry winter conditions is nearly impossible to do accurately until the crop is well into spring growth stages.

     Paris 11% milling wheat is weaker than the U.S. exchanges, suggesting a better emergence season this year in France and other EU wheat production countries. Paris also is a reflection of Black Sea wheat potential.

     The price trend in Chicago wheat futures is either absent or a very slight downward tilt. For the moment it will take some news out of China or Russia to trigger the next phase of wheat market movement.  

Stay tuned. When the change comes it may be “interesting”, and potentially volatile.

Market Bullets® Wednesday, April 23, 2025: Pre-Dawn

     CHS will deliver 60,000 metric tonnes of wheat to Jordan in the last half of July, originated in one of several source countries, likely from the U.S., although Jordanian wheat deliveries have been dominated by Black Sea origins in recent years. With recent wheat price declines and a weaker U.S. Dollar, U.S. Hard Red Winter (HRW) has become competitive.

     Significant rains, 4 inches or more are expected from Iowa and Indiana toward Nebraska Illinois and Indiana. Western Kansas and Oklahoma may finally get some moisture, some 1-2 inches in the next few days. This is not a price positive factor, as some of the recent positive days had been resting on declining crop conditions in the western Hard Red Winter (HRW) wheat states.

     Crop conditions in the PNW have been steady-better, with the most recent USDA condition report showing WA at 69% Good-to-excellent (GeX), OR 56% vs 49% last week, and ID at 70% vs 68.

     The national, 18-state winter wheat aggregate condition as of April 20th was reported at 45% GeX, a couple of % lower than April 13th.

     TX and NE as representatives of the wester HRW belt showed 46% and 0 headed, with conditions at TX 27% GeX and NE 30%.

     Paris 11% Milling Wheat futures are hitting new lows dating back to August of ’24, as French wheat crop conditions have improved. The Black Sea wheat market is also indicated by the Paris contract, and Russian wheat crop conditions have given no indications of losses (yet). It will be some weeks before those stats can actually be calculated.

     The wheat market extended charts (see the Monthly and Annual Chicago wheat charts) show a sideways band that is mature, but not historically stretched out too much. The market is too wary to scare buyers into covering, and the sellers are aware that with global wheat supplies in relative tightness do not have a “deep bench”, so any factor that tilts toward reduction in northern hemisphere crop reduction will be friendly to wheat prices. The first upside target, if the trigger event ever arrives would be the highs of June 2023 and May of 2024 around $7.30, about $2.00 above todays moribund trading range. We just say that to be cheerful, not to trigger buying). It will take some serious work to move wheat that far.

Steady as she goes. Stay awake. Stay tuned.

Market Bullets® Monday, April 21, 2025: Close

     The wise guy says, “Too many sellers and not enough buyers”. Chicago wheat trimmed off about a dime on Monday, ending at the low side of the rising, 15-session channel. This is not a strong wheat market, but there is enough worry about the southwest Hard Red Winter (HRW) wheat crop due to dry conditions to keep the price from more serious damage. The U.S. Dollar Index (which is mostly tuned to European currencies) is down to year-ago lows, historically not a major decline (yet), but declining interest rates will continue to be a brake on USD strength.

     Natural Gas futures are down hard on Monday with short-term surplus in the pipeline. Nat Gas is a major component of anhydrous ammonia production, although nitrogen has been going up in recent weeks, it takes quite a few weeks for Nat Gas price moves to impact actual retail prices.

     Stock indices are lower, but still above the midpoint of recent swings. Copper, a big factor in international construction costs, is stable, suggesting that stock markets volatility is over-done.

     The background for wheat prices is nervous but still functioning well. Most politicians realize that it is playing with fire to comment too harshly on stock performance.

     For now, wheat is weak, but still hanging onto recent mediocre gains. One day at a time.

Stay tuned.

Market Bullets® Thursday, April 17, 2025: Pre-Dawn

     Current fundamental wheat market factors have been dissected, reassembled, scoped and reviewed to the point of exhaustion. The weather will happen when it happens, and the market will react appropriately. Tariffs will work as incentives to negotiate or they won’t, and the wheat market will continue to display prices that seek the most efficient way available in our world to move all of the wheat from the hands of producers to the hands of the consumers.

     If there is too much wheat, the price will decline until there is enough demand to absorb the surplus and less wheat is produced. If there is not enough wheat, the price will rise until the supply is rationed and more is produced. The cycle between these poles of production and consumption will never cease.

     Wheat is trading very near or slightly below break-even for many growers. We have seen that growers will continue for a while even if the price is not enough to pay all of the bills, but this does not continue without production eventually declining to the point where wheat becomes scarce enough that it regains value, incentivizing more producers to increase production. The world knows this, and the market itself knows this.

     The market is designed to solve this problem.

     The wild card is politics. The irresistible impulse to interfere with the natural cycle of supply and demand is perilous because it creates harmful imbalances, either gross surpluses that are very expensive, or a decline in production that can destroy capacity to recover, leading to wild price swings that, although they are self-correcting, are as destructive as bad weather to the wheat industry.

     So now we must do two things; First to market our wheat deliberately and intelligently to maximize opportunities. Speculation has its place, but it is not necessary for success. Second, to try to prevent hijacking and weaponization of the markets by powerful political interests. The natural market cycles will not kill our business, but gross intervention in those markets is a known business killer.

     Don’t surrender your powers as a producer; the power of an open market plus your skill at adapting to natural cycles. The current low phase of the price cycle will end, and when it does you will know it. Meanwhile…

     The Chicago wheat futures market as a bellwether has proven for the last 20 months that it is aware that the price is near the point where wheat production will begin to decline below global consumption needs. Now we are just waiting for the next phase to begin. It will be simple to identify, as the last 20 months of market pattern have set clear boundaries. If the market moves into an uptrend, be as patient as possible. If it moves into another leg lower, continuing the downtrend that has been in place for 33 months since the spring of 2022, then be as aggressive as your marketing plan allows. Sell on schedule and prepare ways to make the market work for you if it begins to recover.

     Call your merchant to discuss what makes sense for your operation. Your confidence in the alternatives will rise, increasing the odds in your favor, and decreasing stress. Watch the trend, ride the trend!

Stay tuned and good hunting!

Market Bullets® Wednesday, April 16, 2025: Pre-Dawn

     This week, Jordan completed an open tender for wheat of 120,000 metric tonnes of wheat for delivery in 50-60,000 tonne consignments between July 1-15, July 16-31, August 1-15 and August 16-30, U.S. origin wheat has not been exported to Jordan since 2018.

     The last significant U.S. origin wheat into Egypt (the largest global importer of wheat from all sources) was in 2021, but since then, Black Sea origins have dominated their regional markets completely, based on transportation/location advantages and low cost of production factors.

     SovEcon, a Russia-based market analyst, has maintained its forecast for Russia's 2025 wheat production at 78.7 million metric tons (MMT), down from 82.4 MMT last year. Weather risks remain higher than normal, with drought-stressed crop conditions heading into last fall’s dormancy, but current indications are for generally stable conditions. The Stavropol region, the third largest wheat production area in Russia, accounting for about 10% of last year’s wheat crop, was hit with hail and harsh winter conditions a week ago, which seems more like needed moisture, even if it was in a nasty form.

     The Buenos Aires Grains Exchange (BAGE) estimates Argentina’s next wheat crop at 20.5 million metric tonnes for 2025/26, 1.9 million tonnes (10%) larger than last year’s 18.6.

     Fertilizer prices are generally rising slowly, even as natural gas contracts have fallen about 20% from the first trading day of April. Nat Gas represents more than 60% of the input cost of producing anhydrous ammonia, a significant application of nitrogen to many dryland wheat operations.

     The wheat price is at least stable, with quite a lot of political drama around the arena. The world loves to wrangle politics, but people have to eat! The price trend for wheat is without a mandate, sitting near the long-term lows that have held in place for 20 months. That makes a nice platform from which to launch, but there is no launch date. The Russian wheat crop is not made, which is a well known, much discussed fact, but there is no way to rush the crop. It will come or not, and the weather is going to play a role, but up to now, it has been benign. Hanging onto wheat while hoping for a weather event in Russia to make prices rise is not a good way to market wheat, but holding with a yellow alert status near long-term lows is a decent way to try to be opportunistic. If the lows are broken, then sell some wheat. If the high side of the range is broken out, then sit back a see how far it wants to go. This is a chart game now, as spring “silly season” often is. The trend is sideways, with a very slight bias to the low side. If Russia slips through the spring season with adequate rainfall and mild temperatures, this market will be negative, as it has already built in some weather risk premium. The tariffs seem not likely to be a big factor. So we hide and watch.

Stay on this channel, as there will be alerts along the way at some point(s).

Market Bullets® Tuesday, April 15, 2025: Pre-Dawn

     Northern hemisphere wheat is developing nicely, including Russian/Ukrainian wheat. There are some regional stress points showing, but none large enough to move the market. There are still some weeks ahead that may bring weather events, but this is a good time to be wary of “confirmation bias” in market thinking.

     U.S. wheat shipments marketing-year-to-date stand at 18.295 million metric tonnes (672.2 million bushels), a 14.42% increase from the same time last year. 

     The moisture starved Southern Plains, from the TX panhandle to western KS are seeing rain in their forecast, still not too late to make a significant difference in production, but every day now counts hard.

     The weekly USDA/NASS U.S. Crop Progress report says US spring wheat is 7% planted, at the 5-year average. WA is at 28% planted vs 42% 5-yr Average. ID is 38% done vs 31% avg. winter wheat crop conditions were down 1% to 47% good/excellent for the 18-state total.

     PNW winter wheat shows WA at 69% good-to-excellent (up 4%), OR 49% (down 11% - ?) and ID 68% (down 1%). No market-moving numbers here, but Oregon’s numbers were anomalous.

     TX winter wheat condition apparently dropped from 26% good-to-excellent to 22%. Need rain.  

     Early trade on Tuesday showed not much to expect. Maybe some slow fade in Chicago, giving back most of the gains from last Friday (sponsored by fund short-covering, triggered by Not Much). The short-term wheat charts are not flashing any signals. The long-term (monthly or annual) charts have not given a go signal for many months. We are willing to be patient, especially since we don’t have a choice right now, but the trendline for wheat is flat. When the change comes it will show up here.

Stay tuned.  

Market Bullets® Monday, April 14, 2025: Pre-Dawn

                       China, and South Africa) is continuing, although this is still in very early stages. One feature mentioned in previous announcements of the exchange idea has been a less open system of grain sales and purchases, including “private agreements” and not open tenders, putting more wheat pricing power in the hands of the government of Russia.

     Russia's Deputy Prime Minister Dmitry Nikolayevich Patrushev’s office reported last week that 93% of the country's winter grain crop is in "normal" condition. There are now a few comments and indications that Russia’s wheat crop has not declined to far this spring, following last fall’s drought affected stand. Their winter has not yet finished, as last week early emerging wheat may have experienced some damage from hail and very low temperatures. It is still early enough in the season that measuring the crop condition is a bit sketchy, but by the end of April, the market will be expecting to see more accurate data. Many among the western wheat trade have looked to Russia’s crop condition as a price-positive over the next 30 days. So far, it has not been a market factor. Standby for more on this.

     One reason that the tariff trade conflict with China may not have a dramatic effect on grain market prices is that global capacity of wheat, corn and particularly soybeans is limited. China will absorb a certain amount, which ultimately has the effect of supporting global prices, whether it comes from U.S., Russian or Brazilian origins. Technical analysis of corn and soybean charts is tilting toward upward potential, a healthy if indirect factor behind wheat price potential.

     FranceAgriMer announced that 75% of the country’s soft wheat crop is rated good-to-excellent through April 7th. One factor that has supported global wheat prices is the near disaster in French wheat production last summer. They are on their way to a recovery year, which should show up in Paris Milling Wheat futures contracts.  

     Friday’s rally in wheat did not have headlines to drive it, but the funds were buyers in Chicago, reducing their net short position by about 10,800 contracts, now at 91,924, still historically a relatively heavy net short. There is still dry powder available.

     Take all of the above and add it together: hints of positive tone, but the weekly Chicago charts show only a sideways channel (still below the BoR moving average).

Stay tuned to this channel.

Market Bullets® Friday, April 11, 2025: Pre-Dawn

     Russia’s Institute for Ag Market Studies (IKAR) this week suggested the country's winter crops are in “relatively” good condition and pointed to expectations for a wheat harvest projection for 82.5 million tonnes. Which is a couple of million tonnes stronger than the talk a month ago. In the past the Russians have been better at projecting smaller crops and price-positive factors than expansionary, price-negative crop estimates, so this announcement may be taken more seriously. It is a small adjustment, less than 2%.  

     France’s Strategie Grains analysts raised their All-EU soft Wheat production forecast to 128.1 million metric tonnes, up +600,000 tonnes (about +0.47%) from the previous estimate. Marginal.

      The (over) anticipated impact of Section 301 vessel fees is easing, as U.S. Trade Rep Greer is indicating the fees may not be fully implemented or that they could be “cumulative”. The administrative target is apparently an attempt to re-vitalize a tattered U.S. shipbuilding industry, but mostly seems to be calling attention to a dependency on China for too many things.

     Southern KS, western OK and NE are the driest of the southern plains wheat states, although some marginal moisture has reached the edges of that region in the last month. Texas wheat was reported on Monday at 26% good-to-excellent condition, while OK was listed at 42% and Nebraska at 37%.  Texas harvest usually shows up in Brownsville in the middle-to-third-week of May, about a month away.  

     Marginal changes in ag statistics, like the ones USDA provided in the April WASDE Thursday, are not likely to run the market very far. Wheat stats were mildly negative, with U.S. carryout projected by USDA at 846 Million bushels, above the average of pre-report analysts guesses. World ending stocks were also very slightly increased to 260.70 million metric tonnes, just a tid above the average guess. The market responded with a proportional decline of -4 for Chicago May contracts and -3 for Hard Red Spring (HRS).  KC Hard Red Winter (HRW) and Paris Milling Wheat were weaker, both down 10-11 cents per bushel, likely in part due to the IKAR hints of somewhat improved crop strength in Russia’s vast wheat hectares.

     It will take something more than we what are seeing on the screen today to generate a significant wheat price rally (more than 50 cents+-), with or without tariffs and vessel fees. At the moment there is enough wheat for everyone with no major threat to supply looming, and the trading funds are in a complacent mood. All of this could change quickly, as quiet markets are relatively rare periods of late, so the only solution is to set price alerts on the range boundaries and have a thoughtful conversation with your co-op merchant about tactical plans that can yield cash flow and take advantage of 50-90-cent futures range movements.   

     Every upward move in every market starts with one (1) session up. That makes this business interesting every day! Pay attention to the patterns that show up, usually after a long period of no-trend, otherwise known as a base. We will see it when it comes, but only if we are looking.

Stay tuned!   

Market Bullets® Thursday, April 10, 2025: Pre-Dawn

     At 4:00 AM Thursday, wheat futures were up 2-6 cents across the board, including Paris. The World Ag Supply/Demand Estimates from USDA will hold the market’s attention until after 9:00 AM.  

     Algeria has accepted tendered offers for durum wheat from Canada, Australia and the United States, with shipments March 1-15, March 16-31 and April 1-15. Algeria is expected to import over 9 million tonnes of wheat to meet domestic demand in the marketing year 2025-26. 

     On Tuesday, with regard to “301 Port Fees” the U.S. Trade Representative Jamieson Greer told the Senate Finance Committee that the administration is “revising the proposal based on public input” to consider vessel capacity and reduce fees for ships transporting agricultural goods. It the container ships that are the money targets. In any case the pressure has dropped considerably with the “pause” of the tariffs except for China. There is no way to calculate realistic capital forecasts until the matter is much more settled, not likely for at least a couple of months.

     As of Thursday morning at 3:30 AM, The Chicago wheat futures market has gained an average of about 3¾-cents per session, but the daily highs have been within ¾-cent of each other. This is known as a “grinding” market, the opposite of an “impulsive” one. In order to declare an uptrend, we have to force a 1-2-3 pattern to fit, but it’s a bit like the sisty ugler trying on Cinderella’s glass slipper. The May contract is 3 cents below its 135-day statistical mean, and 14 cents below the now-horizontal BoR moving average line. All of that is merely an indication of a flat market awaiting motivation.

     USDA will provide some diversion on Thursday at 9:00 AM Pacific Time (UTC-7), 11 Central. The analyst’s consensus based on a Reuters pre-report survey is for an 825 million bushel ending stocks figure for the year, about 6 million greater than last month’s USDA figure. World Stocks of wheat are average-guessed to be at 260.39 million metric tonnes, that’s about -0.12% (twelve one-hundredths of 1%), which is less than the error rate of the actual number. Not impressive. But that is the most exciting thing we have to look at except the tariff and port-fee circus.    

     The charts are not showing a tradeable trend, but they will at some point.

     The stock market has about exhausted itself for the week, with wind-sprints the length of the field in both directions, interrupted only by jumping jacks in between. Friday’s closing settlement may not reveal much about direction. The thing to focus on is the quality of the companies themselves, and not the whippy price action. It is being demonstrated as this is written that the administration is aware of and sensitive to the perceptions of the business community. Impulsive trading on fear or anxiety is not a good idea…skepticism good – cynicism bad! Better to be emotionally centered and deliberate.

     We will see the changes as they emerge. When those changes are confirmed, then we will follow planned actions.

Stay tuned.

Market Bullets® Wednesday, April 9, 2025: PM

The “Maestro” has directed that the nations that have not retaliated be rewarded with a rest! The concert is not over yet.

Market Bullets® Wednesday, April 9, 2025: Pre-Dawn

     French milling wheat exports from Rouen have been increasing new high volumes for the last couple of months, the beginning of a large recovery from the disastrous recent year. The French wheat crop is a large factor in European markets, competing often with Russian wheat.

     Yurkiye is entering their critical wheat maturation season with short moisture. The region affected is related to the extreme southern Russian wheat production region. Since crop condition is not regularly measured and published in Russia, crop condition reports in adjacent countries can be the only reasonable data available.     

     USDA will release the April World Ag Supply/Demand Estimates on Thursday at 9:00 AM PDT (UTC-70, 11:00 Central. On the heels of the quarterly stocks and planting intentions from March 31, this particular report is unlikely to stir trading energy, but new ending stocks estimates may shade the attitude of the wheat market just enough to push the price below the technical lines that are so well defined just below the current price activity, so Thursday’s session will be dominated by the pre-report guess and check ritual.

     Wheat has been well behaved for the last few sessions, with a display of respect for the technical support price zone that is now about 16 months old. This is a pattern base that is in proportion to the size of the price decline from the war-driven highs of 2022, suggesting a technically positive period if the base holds together.

     The 94-week statistical mean has a slight negative slope. The current price of wheat in Chicago is right on this indicator. There is no mandate showing on the charts for a rally, and little to frighten the bid funds or end-users into a short-covering (buying to close out previously sold contracts) rally.

     It may be dull, but there is large potential in this market, so consistent observation remains more important than usual.

     The pattern change, when it comes, will be quickly identified on the charts before the fundamental picture clarifies.

 Stay tuned.   

Market Bullets® Tuesday, April 8, 2025: Pre-Dawn

     The first USDA Crop Condition Report for the marketing year shows overall wheat crop condition of April 6, 2025 at a rather dismal performance so far:

The National 18-state Good-to-Excellent (Gex) is at 48% versus last year same week at 56%.

     PNW 3-state winter wheat condition for the week of April 6 at about 65% overall,

     2025 – WA 65%, OR 60% and ID 69%.  

     2024 – WA 44%, OR 73% and ID 63%

     Texas is the weakest at 26% GEx versus last year at 44% same week.

     The Chicago Soft Red Winter (SRW) market was up 4¾ cents at 4:00 AM Pacific Time (UTC-7). KC Hard Red Winter (HRW) was up 4 and Minneapolis Hard Red Spring (HRS) was up 3-5. Paris Milling Wheat at mid-session was indicating mixed plus or minus the equivalent of 1-cent per bushel.

     Wheat is still trying to stay on a positive slope. The effects of large-scale economic adjustments on wheat may be muted, as it represents a sensitive and important staple for so many billions of humans on the planet. The politicians understand this.

     Even with the above factoid, the market is essentially headline-driven for now, and the funds were net sellers of wheat futures in the last week, pushing their overall position over the 100,000 contract short-sold level last seen in the spring of 2017. Ultimately this is a fuel source for upward price movement if and when something comes along to stampede the herd into buying back those sold contracts. For now they are relatively calm.

     Stay on the beam. Look for changes on the charts. Your carefully thought-out marketing plan is your best tool. Be patient.   

Market Bullets® Monday, April 7, 2025: Pre-Dawn

     Some of the key markets; The 2-Year T-Note interest rate, gold, and crude oil, have all worked below Friday’s wide range in opening sessions, printing mostly new lows, but they had moderated slightly upward as Sunday-Monday trade continued. The big stock Indices: S&P and Dow Jones Index futures, have each declined another 5%-6% to touch the 20% pullback level late Sunday, but by 2:45 AM PDT (UTC-7) had recovered slightly and are not disorderly. Monday’s session will be instructive (if not destructive) as the Overhaul continues. For now, “Fasten your seatbelts, it’s going to be a bumpy night.”

     As a young broker during the 1987 “Black Monday”, during which the stock market was down 22.6% in a single day, one thing that stands out in my memory is that those who sold heavily on that day or even during the Friday session preceding that day, is that many of them took very heavy losses and then never recovered, as they did not have the emotional energy to re-acquire their former positions in good companies. It took 9 months, until July of the following year, before the entire episode was erased entirely by a rising market.  The companies whose stock prices have dropped have not dropped because of actual problems at this point…only forecast ones. The old rule is: If you must forecast, forecast often, as things may change.

     So the shadow of the tariffs is still just that, a shadow. Mr. Putin, whose economy was virtually unplugged from the Petro-Dollar, with heavy sanctions on Russia and (almost) anyone who was willing to trade with him, is probably laughing. He has survived. President Trump’s political enemies should not be underestimated and will certainly attempt to use any weakness to panic the troops into a stampede. As the markets retrace, it is best to watch closely, as the market speaks a kind of truth that is not available on TV interview shows.   

     Wheat futures on Sunday evening are unch to  plus 2 cents per bushel across the three major U.S. exchanges. Paris is indicating an unch to slightly positive start for the week.  

     It is just dawning by now that the new tariffs are somewhat negotiable, no matter what President Trump says on “Truth Social”, but the game is “New York Style Hardball”, and it is unlikely that Trump will give away much ground in early talks.  For marketers of wheat, the market is still above that long and well-known sideways bottom zone. Corn and beans are trading quietly down 2-5 cents as of 2:45 AM Pacific Daylight Time (UTC-7).

     The trend for wheat is hard to discern. With the disruption of the financial markets and Political din, we will merely watch the charts for a signal. Alert patience.

Stay tuned.

Market Bullets® Friday, April 4, 2025: Close

     The dominant news item on Friday was the stock market break, scoring a minus -9% week, now about 17% below the highs of mid-February. The financial industry seems less interested in placing blame for the general price pullback and is more attentive to examination of the underlying basis and practical effects of the currently dominant factors, emotional and otherwise. The political industry has all of the bullhorns turned up to “10”, either defensively or offensively speaking. The money machine is undergoing overhaul and recalibration. Analysis of the effect on anything involving cash flow is one-day-at-a-time. It will take some time for the world to settle back down to work, as some of the mechanisms involved have been in place for many decades. The group(s) that have benefitted from the system for so long are very unhappy about any changes, a well-known phenomenon, but in the end, they are mostly creative, energetic, and determined people (honest or dishonest). They will find other ways to extract a living if they must. It’s likely to be an anxious time, and fear is a very poor source of motivation, as it leads to bad decisions based on overreaction or exhaustion. Meanwhile, there is little guidance on how long this will last and how far it will go.

     For our part, we insist it is a time to be deliberate and thoughtful about what we accept as “good” data. The variations in prices of everything, including wheat, can be distorted for longer than we would like. There are few better ways to observe this for personal and financial navigation purposes than with the charts that allow observations of relationships, spreads, reactions, and trends. Listening to the mainstream “News” is often just one long corporate commercial, and TikTok is not often the best source of reliable data. At least the charts tell us where to look for information.

     The wheat market did a head-fake to the downside in early trading on Friday, testing the long-term lows (again) and then clawed back up to settle with a positive ¾-cent for the week in Chicago May futures. KC Hard Red Winter (HRW) was the strongest for the week among the major wheat futures markets, up about 6 cents. Minneapolis Hard Red Spring (HRS) gained 2 cents for the period, and Paris Milling Wheat futures gained just €1.00 per metric tonne (about 3 cents per bushel). The weekend will give the trade a chance to assess positions and make plans. The penny is on the track. Now we hide and watch, but we must be ready to take planned actions.

     Gold was down $86, reaching a low of $2,741 and closing at $3,035.40 per Troy ounce, a retracement totaling about $165 now below the recent all-time high, a 5% pullback in two sessions.

     2-Year Treasury Notes futures indicate the lowest interest rate since September of 2022. Friday’s trade pushed the rate down and then turned around to close a little stronger, a similar pattern seen in many other markets Friday, including the U.S. Dollar Index. The Fed has not been the motive force in the recent rate decline.

     The value of the U.S. Dollar Index finished the week well above its low for the week. The short-term trendline is still negative, but there is no new chart development. With regard to the Chinese Yuan, the greenback is steady. The Russian Ruble has been recovering some global market strength versus the Dollar and the Yuan, but has paused and is holding quietly amid the jittery global currency markets.         

     West Texas Intermediate crude oil contracts fell -$7.04 (-10%) for the week to -$9.16 for the month-to-date, settling at their lowest since April of 2021, breaking a long-term pattern of buying support. The technical calculations related to the old-school pattern failure suggest potential to the $40 per barrel zone (another -$30 or so). Outside of the price of gas, we have no skin in that game, but it seems to feel good somehow, like a tax break or a holiday.

     Diesel followed crude oil lower, about -7%, but broke no important chart patterns.

     Copper has pulled back to within 15 cents per pound below of its 61-month, upward sloped statistical mean.

     So far the old trader is saying that nothing here is really impressive, that the pullbacks seen so far are normal, natural and even overdue. None of the global leaders involved are likely to be interested in prolonging the event underway (except maybe Vladimir Putin). It will serve us well to take some time this weekend to consider at arm’s length what we are seeing. It occurs to us that this is just the beginning of a long period of adjustment, but that it could have been much, much worse if done later.

This thing is trackable. We are tracking it. More commentary later. Stay tuned.

Market Bullets® Friday, April 4, 2025: Pre-Dawn

     Diesel dropped several percent on Thursday. Most of the market perspective is less about direct effects of tariffs on imported fuel or crude oil and more about eight OPEC+ ministers (Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman, and Kazakhstan) agreeing to raise crude oil production starting in May with a jump of 411,000 barrels per day, quite a bit more than the trade had expected. The tariff-effect calculation is focused on broad effects on many markets that will need time to recalibrate, setting up a lower demand pattern that has been anticipated for months, with or without tariffs.

     It is probable the Putin, an influential OPEC+ participant, does not have our best interests in mind. It seems intuitive that he may be anticipating an increase in production in the U.S. and wishes shape OPEC+’s actions to decrease the profit calculations for re-opening wells and building pipelines. This strategy has worked before.     

     Meanwhile, ag producers may benefit from lower fuel costs for a time. Diesel and Crude futures dropped about 5%-6% on Thursday. In early trade Friday morning they were holding near the lows of mid-March. If confirmed by additional market action, this kind of swift price movement always takes several days or even weeks to work its way into retail channels.  Forward decisions about commitments on fuel purchasing may be more effective with attention to the trend.

     Global bulk ocean vessel freight rates had been in an upward recovery from 14-month lows, but on Wednesday and Thursday they have paused the rise, apparently in harmony with global anxiety over possibly slower business growth. The competition between wheat exporters is not affected much, as they all have to apply to the same merchant marine bottoms to move wheat, but there are some new rules about “Port Fees” that may cause changes in the wheat exporting arena. Gonna keep an eye on this.  

     As of Wednesday’s close of business, tariffs versus Mexico and Canada were not activated and the previous exemption on all United States-Mexico-Canada Agreement (USMCA) compliant goods remaining in place (a relief to wheat exports). Effective April 9th, Japan will be seeing new tariffs at 24%, South Korea 25% and Philippines at 17%. The markets will be digesting this set of trade hurdles for some time, so responses may be delayed.   

     There are no new chart pattern developments for wheat. Friday very early trade had Chicago, KC Hard Red Winter wheat and Minneapolis Hard Red Spring (HRS) futures all down 3-4 cents, all still perilously close to key long-term established low price bands that, if penetrated will likely trigger more selling pressure with an open field containing few previous measuring points of historical buyer support. The market has been working on this chart pattern base for many months. If the price band holds, it will function as a price benchmark for technical calculations of upward targets.

     For marketers of cash wheat, the support band under this market could function as a selling trigger if broken, as it would very likely take some time for prices to find their way back above the line.

This is trackable. Let’s track it!

Market Bullets® Thursday, April 3, 2025: Pre-Dawn

     The global market complex – the whole thing, has some striking features in the present environment; rising volatility, as tariff and cease-fire negotiations rumble and boom, and the spring grain marketing (the “Silly Season”) kicks off. Interest rates are declining, leading to a weaker U.S. Dollar Index.  That index is heavily weighted toward European currencies, with the Japanese Yen as the lone Pacific representative currency. The Dollar is more stable in Chinese Yuan terms than the EuroDollar. Copper has pulled back from all-time highs, but is still trading within a few percent of those highs, mostly on strong demand. Crude oil is approaching a very long-established horizonal chart line of support, which if it is broken downward, suggests a return to lows not seen since 2020 around the $30-$50 level. Probably the most outstanding futures price record at the moment is gold, which has posted a series of new all-time highs (see comment below gold chart).

     Wheat prices have shown an awareness of a price level of support that has been established over many months of trade. In Chicago continuous front-month futures charts, wheat has been flirting with the multiple lows dating back to December of 2023 in a narrow range of $5.14 to $5.26. Early Thursday morning the May futures were around $5.30, still counting a plus 1¾-cent gain week-to-date.

     Markets generally do not react well to uncertainty, but it is remarkable that we have not seen much higher volatility so far. Money usually moves to where it is treated the best, minimizing risk and maximizing return. At this point the overall market message seems to be “continue as before”, but there is no trader awake that does not understand that this could change very quickly, hence the exaggerated response to rumors of rumors.

     This requires that we pay close attention to the tone of the market, a term that may not be easily quantified, but that most experienced traders know intimately.

     The wheat market tone is nervous, but sellers are as reluctant as buyers at present. For now, we will hide and watch. The mandate will emerge at some point.       

     How the markets speak?  In price patterns (intensity and duration). How do we listen? Looking at the patterns and observing the fundamentals that correspond; government actions/statistics, weather, producer reactions, speculative money movement, emotions of the crowd, effective demand, effective supply, operational costs. The number of variables is limited, but each of them requires good consistent data to be reliably assessed. Here we thank the loyal and dedicated folks to whom falls the job of the analyst and statistician, of which we are neither. We are consumers of analysis and statistics, observers and translators. It is still a demanding job.

     Stay tuned, There is little change, in spite of all the rattle-bang news. Hang tough.      

Market Bullets® Wednesday, April 2, 2025: Pre-Dawn

     Oklahoma, Texas, Montana and South Dakota are the most rain-needy Hard Red Winter wheat states. There is moisture in the forecast, but forecast is not cast in mud yet. Monday April 7th we will see the first release of weekly Crop Condition reports from USDA.

     The USDA sez 2025 U.S. corn planted acreage is intended at 95.326 million acres, up from 94.0 million at the Feb Ag Forum and nearly a million above the average estimate. Looks like the soybean/corn price ratio’s indicated favor toward corn was correct, rotation or no rotation. The price of corn has played a role in encouraging wheat to rally. Now the sister grain may be unable to help much more.

     A Reuters survey of analysts and traders has the expected 2025/26 Australian wheat crop at 28.6 million tonnes, 16% below last year’s 34.1 million on dry conditions. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) has pegged the crop at 30.5 million metric tonnes. This could if realized make export pricing of U.S. wheat into in the Pacific Rim easier. Only about 15% of total global wheat exports originate in the southern hemisphere.

     Minneapolis Hard Red Spring wheat futures were down 4-5 cents at 2:30 AM Pacific Time (UTC-7). Paris 11% Milling wheat futures were indicating about the equivalent of 3 cents per bushel.

     China has announced supplementary tariffs of up to 15% on imports from US origins starting March 10, mostly focused on agricultural goods.

     The wheat market is still above the dangerous, sensitive price levels that it visited last week around $5.18, but upside follow-through has been slow in coming. There is a fair chance that we will see more testing of those long-term support price levels before there is a rally of significance. It’s all about the weather now, both in the southern U.S. plains and in the Volga Valley and north. Tariffs will be an ongoing issue, but so far are not playing a major role for wheat prices.

     The short-term trend is unconvincing but positive. The Chicago price of wheat is well below the Box-o-Rox moving average. The choices are either hold and prepare for potential failure of the support price zone, or sell increments on schedule and prepare re-buy orders for the first buy signal above current levels. No-one will be able to criticize either strategy.

Stay tuned.

Market Bullets® Tuesday, April 1, 2025: Pre-Dawn

     USDA’s reports Monday morning delivered a little bias, but no explosive surprises.

      U.S. wheat stocks as of March 1 were posted at 1.236 billion bushels, 15 million bushels above the average trade pre-report guess, but within the range of expectations.  

     The Annual Prospective Plantings report showed 45.35 million acres of wheat intended this year, significantly below the 46.53 million acre pre-report trade average. Total winter wheat acres were 800,000 acres below the January Winter Wheat Seedings 33.315 million and 75,000 below last year. Other Spring wheat was showed with intentions of 10.02 million acres, also below the 10.531 million acre trade estimate.

     This was just enough of a miss on the acreage to release the buyers that had been waiting to pounce, pushing Chicago wheat up 9 cents, KC Hard Red Winter (HRW) up about 4½ and Minneapolis Hard Red Spring (HRS) was the leader, with a 10-cent gain. Paris seems to have taken its lead from Chicago/KC with a 4-cent equivalent gain, and was still slightly positive heading into their late session Tuesday morning (They are 7 hours ahead of Pacific Time – 6 hours ahead of Central).   

     In very early AM trading, the market was hanging onto the gains across the board.

     The setup looks technically positive, but has not been confirmed yet. We’ll just take this one day at a time. At least there was no collapse on Monday!

Stay tuned.

Market Bullets® Monday, March 31, 2025: Pre-Dawn

     USDA Planting Intentions and Stocks inventory reports due out at 9:00 AM Pacific Daylight Time (UTC-7), 11:00 Central. Until the data-dump is completed, the market will just wander about without mandate. By 3:30 AM Pacific Time Monday the Chicago May contract had traded back and forth inside of 3 cents on either side of unchanged. KC showed a net minus 5 cents, based on improving weather conditions in the southern plains states. Minneapolis was down 1-2 cents and Paris 11% milling wheat was indicating a price-positive session.

     More commentary pending post-USDA reports on a chance of being helpful with regard to the trend. Stay tuned.

Market Bullets® Friday, March 28, 2025: Closing Perspective

     This week saw: Gold June delivery contracts to new all-time highs at $3,124.40 per Troy ounce on Friday, March 28, 2025. – Copper May delivery contracts to new all-time highs at $3.26 per pound on Wednesday, March 26, 2025 (Global copper supplies tightening on rapid pace of consumption). The Dow Jones futures contract is not “plummeting” and is still trading above the 40,661 lows of March 16 (Currently at 41,583). The world is sitting up nights studying Tariffs and How They Work”. Is it possible to run entirely on tariffs and do away with most of the current tax system? We are heading into some previously explored but not well-mapped economic territory, somewhere beyond “Reciprocal” tariffs. Very educational!

     Chicago wheat broke below previous May contract delivery lows at $5.30 and also the previous March 4th contract low of $5.26 on both Thursday and Friday, but DID NOT close below the March level. This is NOT a confirmed failure – yet. Monday’s USDA Reports may produce enough momentum to either break the lows and target the lowest previous low traded on July 29th at $5.14… or this week’s low may be the base of another attempt to rally into spring weather season.   

     The next few days of trade will be technically fraught, as the market’s chart direction is determined.

     KC on Friday was the weakest of the major futures contracts, with a decline of -37¼ cents on the week, most influenced by mildly improving crop conditions and a poor competitive pricing position in the global arena, in spite of the U.S. Dollar Index declining 3.5% for the Month of March (with one more trading session on Monday).

     There is no confirmation of any Russian stress in early wheat crop conditions, although it is still early to be able to measure such things accurately.

     Chicago wheat was the weakest performer for the month-to-date, with a minus 30 cents as of the close Friday.

     The wheat complex has suffered a beating heading into month-end and quarter-end accounting, setting up potential drama on Monday morning. Even if the report is a dud, and there are no surprises, there may be a “brakes-off” reaction as the complex heads into a traditionally volatile period.

     More post-report on Monday. Stay tuned.

Market Bullets® Friday, March 28, 2025: Pre-Dawn

     Early AM trade for wheat on Friday was negative. Chicago May contracts have fired a warning shot with the penetration of the $5.26 low from January 19th. There are a couple of additional lows between $5.20 and $5.14 from Last July/August. These are the last low boundaries before we reach the price levels of summer of 2020. There are few factors, either emerging or presently dominant that could be counted as price positive.

     On Monday USDA will release wheat seeding estimates, with the average trade pre-report guess of 46.475 million acres. The recent Wheat Outlook Forum forecast was for 47 million acres. The reaction of the market after the report will hinge in part on how well the trade anticipated the new number.

     The trade is looking for 33.97 million acres of winter wheat and about 10.53 million acres of spring wheat, a 53-year low. These guesses are what the industry has been trading. A significant variation on report day is a potential source of price volatility, which is why the trade is hesitant before the report.

     A slight increase to all-wheat inventory stocks is expected, with pre-report guesses averaging 1.215 billion bushels, versus 1.089 billion bushels at the same time last year and 1.570 billion bushels in the previous quarterly report.

      Tariff and vessel tax debates are heating up. The impacts of such efforts, especially vessel taxes, have significant potential to drag on already slowing U.S. ag exports, although at present its still just talk.  

     Quarter-end and month-end position adjustments are underway, giving the market volume that is not necessarily related to trends, but book squaring and profit-taking instead. Most of the positions involved may be replaced quickly from Next tuesday onward, so are not likely to change many trend lines.

      Is there a way to parse all of this marginal statistical tinkering and get perspective on what the market is likely to do? Put up the weekly chart, walk back a few paces from the screen and look at the pattern as if you had never seen it before. Ask. “what is this telling me?”. All of the information above and quite bit more is already built in to the price structure through thousands of real-time, real-money decisions right up to the moment. There is no better indicator than the actual prices being printed.

     We think the market is weak…Duh! We are trading so near to long-term lows that there is a constant threat of a downside breakout. The country is not willingly selling cash wheat into commercial channels at this price, and international buyers are confused by tariff talk. The cessation of war (at least for a time), is a price-negative factor. It is too early for the spring drought in Russia to be a market force. Every day that passes brings the northern hemisphere to a crop, eroding the chances of a price rally greater than a return to recent swing highs. With Friday morning’s break below the support lines, we will have to watch the market every day to confirm or deny a resumption of the long-term downward lines.

     Go ahead and make previously planned wheat sales. There are ways to re-buy if you want to speculate on the upside to come later. Wait until there is a buy signal to do this.

     It is amazing how much discipline selling at a long-term price low requires, but it is that same discipline that will increase profits in an uptrending market.

Stay tuned.

Market Bullets® Thursday, March 27, 2025: Pre-Dawn

     There is a new agreement that included Ukraine and Russia at the table, pausing attacks on shipping and against energy targets (Ukraine had been hitting the refineries and fuel storage depots pretty hard). Russia is insisting that the agreement includes lifting sanctions on food, fertilizer, and shipping along with “several other conditions”. Apparently, the Whitehouse has agreed to promote these ideas. Black Sea grain shipments may not be radically affected, since they were already proceeding, but shipping insurance costs may decline. The overall implication seems to be that the deal is not completed, but may proceed inchoate until Putin decides to change it.

     The Russian-Ukrainian “agreement” (with small ‘a’) is a signal to the wheat trade that more wheat is likely to flow into the global channels, even though there is not likely significant capacity to expand Ukraine’s wheat shipping volume, and Russia already has the quota brakes on. Early AM trade on Thursday had Chicago wheat down a couple of cents. Price movement momentum is still muted, as there are important statistical reports coming Monday, leaving most traders pondering an extra day of housekeeping before Report Day.  

     The market is quiet. Volume is low. Volatility is also allowing option prices to fade a bit.

     Even if the Monday data-dump brings no fireworks, the wheat markets of late have a tendency to hold their collective breath until the report is out, and then to proceed vigorous pursuit of the pre-report agenda as if a brake release had been pulled. Either way; thunder and lightning or calm breeze, we will move on quickly after the quarterlies are released.

     The Chicago wheat May futures contracts on very early trade Thursday are trading just 6 cents above their FW March lows of $5.30. A failure of that level on a closing basis would likely trigger some technical selling that has been holding on for quite a long time, independently of the upcoming USDA data.

     The funds, already net short-sold, have historically shown capacity to add to their positions from their present total. A positive surprise from the Monday reports (smaller corn acreage than expected, for example) could also spark a buying frenzy. This is why the market always waits for reports to be released before committing significant money.

     The trade is nervous, but not impulsive. The price of wheat is near enough to historically significant lows that those prices become mesmerizing, almost magnetic. Most producers are not willing to sell in such proximity to the lows. The market knows this, which has contributed support for many weeks, but there are changes in the wind. It is better to sell at a new low if one must, if only because new lows are very often followed by more new lows. It is very rare that a single new low is printed and becomes the bottom.

     Stay tuned here for more. It sounds dismal because it is dismal, but that is not a reason to suspend a marketing plan.

Market Bullets® Wednesday, March 26, 2025: Pre-Dawn

     For wheat marketers, most of the time corn is a far peripheral, a sister grain that does not compete directly for the same customers, but occasionally has a market effect. The competition between corn and soybeans for planted acres is occasionally fierce, and when this conflict heats up it can affect wheat. USDA’s Planting Intention Report and Quarterly Grain Stocks Inventory, are both due out Monday, March 31 at 9:00 AM Pacific Daylight Time (UTC-7), 11:00 Central.  

     Analysts are posting pre-report estimates of 2025 U.S. corn plantings at 94.3 million acres, 3.7 million above last year, and above USDA’s more recent 94.0 million. The corn/soybean price ratio is running at about 2.23 corn to 1 bean, a price ratio that favors corn acres for a producer that has a choice this spring. 2.5 corn to 1 bean is near the breakeven for this ratio, which has been moving steadily downward for the last 18 months.

     There is often enough force behind the release of the march USDA stats that the market reacts vigorously. Wheat has little to offer on its own, but corn may provide some motivational energy, thus the trade is in a holding pattern until the statistics are out.

     Hard Red Winter (HRW) wheat crop conditions in the southern plains states have leveled off, or at least are not in free-fall. The (very) slight improvements to HRW in the U.S. are similar to those coming from Russia. Both are (very) early, but both are reminders not to depend too heavily on springtime crop losses as a reason to hold wheat that should be priced.

      Wednesday morning early trade is showing no momentum.  The market is waiting.       

Meanwhile, From Gabriel’s desk:

     Picture the wheat market, a bustling marketplace in an ancient city, Brawny-armed Vendors in aprons and sharp-eyed buyers sniff and peer at samples and haggle over prices. The stalls are lined with sacks of wheat—some freshly harvested, others imported from far-off lands. Every interaction is influenced by the rhythm of the city and the whispers of the world beyond its borders.

      In this marketplace, the traders are eyeing the recent moves—prices are tentatively climbing after weeks of decline. December delivery SRW wheat forward contracts sit like a cautious merchant pricing goods at $5.72 3/4, while HRW wheat futures demand a premium at $6.86. Much discussed “Resistance” price levels hang overhead, where it has been clear in the past that there are willing sellers of large amounts. The merchant is wary of increasing prices too much for fear of losing customers. The farmer whose ability to pay his land rent depends on the price he receives for his wheat worries about too many neighbors showing up and flooding the market. The Relative Strength Index suggests that buyers and sellers have reached an uneasy truce, neither pushing too hard nor pulling back entirely.

The fundamental forces shaping this marketplace are the whispers heard in the crowded stalls. "Drought in Argentina," one vendor murmurs. "Dry skies in Western Australia," another adds. Excess rain in Brazil casts shadows, like rumors of spoiled goods spreading fear among buyers. In the U.S., farmers in hard red winter wheat regions are like merchants whose stalls are thinly stocked—they desperately hope for rain to replenish their wares.

      Outside the marketplace, the city’s rulers are making decisions that send ripples through the stalls. Trade policies and tariffs are gatekeepers at the city gates, determining who can bring goods in and out. Inflation and rising interest rates are tax collectors, tightening their grip on merchants’ profits. Geopolitical tensions—raiders threatening the outskirts of the city—add an edge of uncertainty that keeps everyone on their toes.

     This ancient stonewalled, marketplace with dusty streets and creaking wagons is a microcosm of the global wheat market, where supply and demand meet the forces of politics, weather, and human ambition. The vendors—farmers and traders alike—must adapt to the ever-changing dynamics of their world, as they’ve done for centuries. It’s a tale of resilience, ingenuity, and the enduring value of wheat as a cornerstone of civilization. In the end, no-one has the power to control the reality that people have to eat, that the great enemy is still hunger, and that the tenacious and steady wheat farmer is the one without whom we cannot survive.

Market Bullets® Tuesday, March 25, 2025: Pre-Dawn

     Russia’s Institute for Agricultural Market Studies (IKAR) released a fresh 2025 wheat production estimate, raising their forecast estimate from 81.0 to 82.5 million metric tonnes, in a range from 78.5 million to 86.5 million. A 1.5 million tonne increase is slightly less than a 2% change. The significance of this report is not its magnitude but that it is the first increase reported in many weeks and may represent the first whiff of an indication that there may be an only moderately reduced crop versus a seriously drought-squeezed one. It is still a long way to a “made” crop, as the trade knows very well that spring moisture is a difficult variable, and the Russian crop went into dormancy last fall in weak condition.

     The southwestern Hard Red Winter (HRW) wheat states are still pleading for moisture, as they have been teased by the storms further east that have been putting abundant rain on the southeast Soft Red Winter (SRW) states.  

     The private analyst SovEcon released ideas that Russian wheat exports were 1.6 million metric tonnes, below 1.9 million last month and 4.8 million last year, same month. No surprise here, but the figures are consistent with the relatively buoyant wheat market behavior of the last several weeks.

     Arlan Suderman at Stonex, 3-23-25: “The markets will see the peace talks as bearish for wheat prices. A return to peace in the region probably doesn’t change the flow of wheat much, as the war didn’t really slow the flow that much. But it would be expected to reduce shipping costs, while allowing Russia’s ruble to strengthen somewhat.”

https://intel.stonex.com/article-landing?language=en&articleId=101f8a98-4a99-446d-a13a-70a2c9d12b3d&token=721856c6-6e66-4173-9d60-c7c85f9aefb6

     The wheat complex is well aware of the fundamental fact of historically tight global wheat and corn stocks that have had the effect of de-emphasizing aggressive selling below the 92-week mean price line (using Chicago wheat as the representative contract), but this kind of well-worn information is only a descriptor of broad-brush conditions in the background for a long time…in “futures market time” – a flexible concept. 

     Technical commentary on the wires has shifted slightly toward a “hold” for wheat contracts, but with the clear mandate to exit if the lower boundary of the 7-month price range ($5.14 in Chicago May futures)is broken. There are a few intermediate price levels that may serve as warning lines if the market closes below them, the most prominent being the $5.25 - $5.30 zone, about 18-23 cents below very early AM trade on Tuesday. A price chart base that has reached the age of 7 months without a large break has some gravitas, and should be observed carefully.

     The wheat price trend is in doubt, and a test of the patience of wheat marketers is underway. There is still a very slight upward bias, but it is so thin that a small deviation from expectations for the upcoming quarterly Stocks Report along with planting intentions could shred the carefully drawn chart lines, not to mention random tariff considerations. It always is prudent to have some orders to sell incremental amounts of wheat already considered and noted with price and delivery times pre-calculated (it just keeps the psych pressure lower if the market gets crazy).

     The market is trackable, but short-term, daily or shorter charts can generate anxiety that does not serve our purposes.  For a break, take a look at the longer-term, weekly or monthly charts. Stay tuned.

Market Bullets® Monday, March 24, 2025: Pre-Dawn

     It may become very “Teejus” as we wait for “tariff policy developments”, no to mention USDA’s Prospective Plantings and stocks reports (Monday, March 31, 9:00 Pacific Daylight Time – UTC-7), 11:00 AM Central.

     It is likely to be difficult to tease out any expectations of positive price effects, as trade tariff wars have historically never been quick or easy, and both sides suffer. The magic can still happen if the negotiators understand that this is essentially a game of “chicken” that can only end well if both sides give a bit. It is true that the U.S. has been overly generous for many decades of trade negotiations. Maybe this time it will be different.  

     Even with the rising temperature in global trading agreements, China has been a decent buyer of U.S. soybeans. They were in last week totaling 269,900 MT, including 266,100 MT switched from “unknown destinations.” They know we know that they know we know that there are soybeans for sale in Brazil…

     The last weeks U.S. wheat sales of 248,800 metric tonnes (9.14 million bushels) was a marketing-year low and well below the previous week’s 700,000 tonnes. Vietnam and Indonesia were leading buyers but Panama cancelled 272,900 tonnes, presumably due to … trying to make a statement about who is in charge … trade negotiations.

     The large trading funds, a perennial force in wheat trade, have been adding to their significant net short-sold positions, ultimately setting up a reserve of must-be-buyers later. For now, the effect is negative.  

     Russia’s wheat exports are well behind last year’s pace, off almost 7%. Their total marketing-year-to-date is 34.5 million tonnes versus 41 million the previous year.

     Word on the street is that Russian farmers  possessing the capability to choose are shifting away from wheat towards other crops, such as canola or sunseeds, as profitability of the grains approaches break-even or lower.

     The charts are not showing a strong price pattern. Buyers are beginning to behave cautiously and there is still old-crop wheat for sale. This is the time to be watching the charts and talking to your merchandizer about marketing plans.

     Stay tuned to this channel. The changes may come quickly, as we are dependent on weather and trade negotiators (headline generators).  

Market Bullets® Friday, March 21, 2025: Pre-Dawn

     The wheat market has not changed tone or rhythm for many weeks. The market is murmuring that there is little or no need to change prices to ration supplies. The only advantage to such a slow market is that it builds a reliable set of alarm tripwire prices that serve as warnings of significant movement.  

     Wheat price volatility is low, but it is intuitively strong to expect an increase in April.  For anyone using the market to manage risk, bear in mind that high volatility = more expensive options.

     Net weekly U.S. wheat sales for 2024/25 delivery were expected to range from 300,000 to 700,000 MT (11 million to 25.7 million bushels), compared to 783,416 MT the previous week. The previous week’s sales soared 83% above the average for the previous four weeks.

     Analysts are posting pre-report estimates of 2025 U.S. corn plantings at 94.3 million acres, 3.7 million above last year, and above USDA’s more recent 94.0 million. The corn/soybean ratio is running at about 2.23 corn to 1 bean, a price ratio that favors corn acres for a producer that has a choice this spring. 2.5 corn to 1 bean is near the breakeven for this ratio, which has been moving steadily downward for the last 18 months.

     The monthly International Grains Council (IGC) estimates global wheat production for 2024/25 up 2 million tonnes to 799 million (a .002% change). Ending stocks were pegged up 1 million metric tonnes to 265 (.003%). Extremely marginal changes.

     This week’s Federal Open Market Committee (FOMC) meeting made some changes to the Fed’s economic outlook, with inflation projected for this year at 2.7%, up from 2.5% posted in December, more marginal tinkering.

     The end of march is the end of the first quarter, with planting intentions and Stocks-In-All Positions reports. Without new stimuli to push money in or out, the wheat (and other) markets will be less likely to take aggressive positions ahead of the reports. Big trading funds get paid when they close out trades on a monthly and especially a quarterly schedule, so the approach of quarter and month ends may show some volume on that basis alone in the next 7 trading sessions.

     It is rarely prudent to simply hold wheat uncovered in storage, but these next few weeks may be the only time that can make some cents.

Stay tuned. Hang loose. Avoid abuse.   

Market Bullets® Thursday, March 20, 2025: Pre-Dawn

     As of very early trade on Thursday morning, Chicago wheat futures contracts were up just 3-5 cents week-to-date. KC Hard Red Winter (HRW) had been leading based on dry conditions in the southern and southwestern plains states, but with winter storms nibbling at the edges of those regions with snow, the market has been less inclined to worry.

     Russian wheat weather is also mixed. The ability to measure weather damage to their wheat crop is still not defined enough to frighten the wheat markets.

     There are few factors with the power to lift the wheat market much more in the short run. The trendline for wheat is still defined as positive, but there are limits on how far down the price(s) could move without triggering a rush of selling. The downside remains muted because of the uncertainty of crop conditions in key production areas.

     Paris milling wheat futures were vigorously higher on Wednesday, closing up €5.00 (about 15 cents in USD per bushel). The influence of that contract on global wheat price discovery has increased dramatically in the last 3-5 years, as the influence of Russian, Ukrainian and European Union wheat export sales has increased. Chicago is still globally dominant, but Paris “Euronext” contracts have become a “must-watch” item for wheat price trend-followers.

     Gold has been striking brand-new all-time highs every day for several days. Thursday pre-dawn trade saw its peak at $3,065 per Troy ounce and then pulled back to Wednesday’s low around $3,035. The lead gold futures contract has climbed 18% since Christmas (about $469 per ounce). This is at least partly due to inflation (devaluation of the U.S. Dollar), but is also a sign of anxiety among some large entities, central banks, etc.

     For marketers of wheat, there are no solid fundamental reasons to hold large amounts of wheat in storage except the fact that any sale for future delivery should capture a healthy amount of carrying charge, since deferred prices – including new crop – are higher than nearby prices. The spread charts are consistently showing expansion of the cost storage-plus-interest going forward, a sign of a market that is not in need of nearby wheat deliveries. Call your merchant and get an update on the deferred pricing tools, costs, etc. 2025 is shaping up to be a year requiring thoughtful and deliberate marketing decision making.    

In the March 13th release of USDA’s Wheat Market Outlook Some powerful things to think about for wheat producers in the U.S.

https://ers.usda.gov/sites/default/files/_laserfiche/outlooks/111138/WHS-25c.pdf?v=68668

      Global wheat exports in 2024/25 (July–June trade year basis) are forecast at 207.3 million metric tons (MMT), down 16.8 MMT from the previous year and the lowest level in 3 years. Global trade tends to rise over time with growing consumption in parts of the world that are not self-sufficient in domestic wheat production. In the last two decades, Southeast Asia, Sub-Saharan Africa, North Africa, and the Middle East collectively accounted for about 70 percent of the growth in global wheat imports. 

     Total U.S. commitments (the sum of accumulated exports and outstanding sales) are 20.3 million metric tons (MMT) as of February 27, up 12 percent from the same time 4 Wheat Outlook: March 2025, WHS-25c, March 13, 2025 USDA, Economic Research Service last year.1 The largest year-to-year percentage increases in sales are for HRW (up 51 percent) and White (up 45 percent)

     U.S. domestic Crop Regular Weekly Condition Reports from USDA will resume on Monday, April 7, 2025.

     Anyone watching the news about phone calls between Putin and Trump has to be skeptical about whether the Russians will negotiate “in good faith” toward realistic agreements with Ukraine. For the wheat markets this ongoing process offers little disturbance, unless there is a sudden dramatic development. 

Stay tuned, even if it is quiet.

Market Bullets® Wednesday, March 19, 2025: Pre-Dawn

Chart Update Only - Copper moving up strongly on demand - Data Centers take a lot of copper! Wheat trend unch from Tuesday’s trade - still with a slight upward trend. All eyes on Russian and U.S. southwestern Hard Red Winter crop condition.

More commentary post close Wednesday.

Market Bullets® Tuesday, March 18, 2025: Pre-Dawn

     Wheat futures contracts across the board have been positive for the last 10 sessions, but overall volume has been declining, suggesting a weakening momentum, as Large Speculative entities have been reducing their net short position (again), although not at a rapid pace. All of this speaks of a market that is cautious and conservative, a healthy tone for continued firmness of prices, if not a powerful rally.

     The 61.8% price retracement line created by the recent February 18th - March 4th  down move is at about $5.86 in the Chicago May contract, just 14 cents above the last trade as we sit here thrashing the keyboard early Tuesday morning. That technical upside target is reasonable, but it does represent a test of the upward force. It is not reasonable to expect more above that level unless there are developments that provide more buying energy.  The most likely source of such a provision would be weather, but a breakthrough with the Chinese negotiators with regard to grain purchases would give a little lift, yah?   

     Very early AM trade in Chicago May futures show a plus-3-cent status around $5.72. KC is up 4½, Minneapolis Hard Red Spring (HRS) is also up about 4 cents. KC is the leader by about 7 cents more than the other markets so far this week, mostly due to drought in the southern HRW zone. Last Saturday’s massive and tragic 71-vehicle traffic crash in Kansas was set up by a dust-storm, grimly confirming the dry conditions in a wide area.

     The overall tone of the wheat market is positive, but this is not an impulsive market. It has a grinding and deliberate price pattern that has reached several technical levels and managed to overcome them. There are always more targets, no matter how far a market moves, so we are taking this one step at a time. Consolidation and correction is a regular feature of this environment. Weather and political influence on the market are both fickle and occasionally violent.

     The Russian Ruble is at its strongest global currency value since June of 2025, just after the Russian Central Bank (CBRF) switched to the Chinese Yuan as the benchmark currency due to the effects of U.S. sanctions on Ruble/Dollar trading. The central factor in the Ruble gain (See <Ruble-Yuan> chart) is speculative interest in the Ruble on expectations for easing geopolitical tensions.

     Stay on plan, make the incremental sales with a planned price objective. Be patient with this market as long as it is above the BoR green line (see Weekly Chicago chart below). If it drops below that line again, release a bit of wheat.     

Stay tuned. The “interesting” trading season has arrived. 

PS – As of March 17, 2025, no Genetically Modified (GMO) wheat varieties are commercially grown in the U.S. The new variety known as “Clearfield” is NOT a GMO variety, as it was developed through traditional plant breeding techniques at the Texas Agricultural Experiment Station and Texas A&M University. 

MarketBullets® Monday, March 17, 2025: Pre-Dawn

     By Monday, March 17th at 3:00 AM Pacific Daylight Time, Chicago wheat futures had gained back all of last Friday’s small 5½-cent loss and added another 6 cents for a net plus-11½ cents over Friday’s close and the best price level since February 28th. KC Hard Red Winter (HRW) has led the wheat complex upward for the last few weeks on the extended dry conditions on the southern plains. While the European milling wheat contracts traded in Paris have been waiting for Russian weather and crop condition reports, they have traded in a muted imitation of KC.  

     Chicago is challenging some key technical price levels as this is written on Monday morning. The next few days will produce chart test results of a new upward bias.

     PNW soft white wheat wheat Portland/Coast bids have improved 15 cents for March-to-date, versus Chicago up only 1¼-cent since the end of February.  White wheat’s steady demand from the Pacific Rim has been enough to bring Portland bids to their year-to-date best.

     With this short-term show of price enthusiasm, this wheat market is saying it does not yet have full faith in the emerging winter wheat crop’s strength. We have also lost the support of the corn price that had been lending a bit of strength until February 24th.

     The Russian Ruble has gained considerable strength against both the USD and the Chinese Yuan in the last 9 weeks (in harmony with the shift in the tone coming from the Whitehouse about the end of war in Ukraine). The currency improvement in the Ruble is likely to have positive effects on Russian farming economic results, making parts and operating materials easier to procure, although the sanctions placed by the U.S. and others are still in effect. In the longer-term, both Russian and Ukrainian wheat production is likely to increase for the foreseeable future with the cessation of war, but at the present, Russian exports are the slowest they have been in several years, suggesting that they are concerned with crop conditions coming out of winter.

     Wheat is in an uptrend, with little or no new fundamental information flowing. The spring “Silly Season” is upon us! The weather this time of year is capable of overpowering governments as market influence. Chicago wheat is still the bellwether of the world in wheat pricing, and that market is trading this morning above the “Box-o-Rox” indicator, giving a “hold new sales” signal. It is not a trading system, only an indicator, but an opportunistic marketer can use this as a backstop, holding until the price closes back below the line (green on our daily Chicago charts). It’s simple, but it helps.    

      Uptrends are made of upward price movements! Even when there are no direct news headlines pushing the idea of higher prices, the market is made of many thousands of decisions every day by the trade, from the smallest speculative account to billion-dollar funds, which produces an amazing composite of real-time, real-world actions taken with money and not talk, maybe the most honest ongoing stream of market information in the world. Tracking this living, breathing entity which has its own emotions and sensitivities is a marvelous task that is never the same for long. It is not random. It is alive and trackable. Let’s track it!

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MarketBullets® Friday, March 14, 2025: Pre-Dawn

     USDA’s report on wheat export sales for the week ending on March 6 showed a very decent number at 783,416 million metric tonnes, pushing the marketing-year-to-date total to 21.274 million tonnes, 15% better than last year at this point. This provides some relief, as the lead on last year had been shrinking.

     Panama, South Korea and “unknown” were featured buyers on the week.

     Canadian 2025 wheat intended acres were estimated at 27.5 million, a half-million      increase over last year. Spring wheat came as 19.4 million acres, a 450,000 acre increase over last year.  

     Ukraine’s spring planting has begun.

     Russia’s Institute for Ag Market Studies (IKAR) reduced estimated marketing year wheat exports by 1.5 million tonnes to 41 MMT.

     The U.S. Southern plains are mostly being left out of the moisture forecast.  The market is watching very closely, as this is one of the only potentially price-positive market influencing factors outside of Russian wheat areas, a large portion of which entered the seasonal dormancy period last fall in a weak condition. The next few weeks will be key to  their crop expectations and to the global wheat price environment for months to come.

     Wheat futures contracts trading in the wee hours of Friday, March 14th are slipping into negative territory, although the entire range of trade as of 3:00 AM Pacific Time was well within Thursday’s range, leaving us with little indication of trend. The world has been captured by the Tariff Parade for the moment. The market will likely soon grow impatient with the pattern of bluff and call, bluster and ballyhoo and begin to make its own pattern once again. For the moment the tariffs and weather are the only really meaningful information flows.

     The trend for wheat, if we can see one at all, is still slightly upward. In the light of a stock market that is undergoing a normal “correction” phase, it is somewhat remarkable that the price of wheat has held up as well as it has.

     Gold is painting new all-time highds, while the Crude oil – Diesel markets are flabby and look weak.

     Stay in touch. This phase is temporary, we just don’t know what that means yet…

MarketBullets® Thursday, March 13, 2025: Pre-Dawn

   Gold is still in an uptrend, sneaking back up toward another new all-time high, trading at about $2,954 versus the old high at $2,973, not a big challenge. Gold has always been a risk-sensitive commodity, but there has been heavy buying from large entities in the last 57 trading sessions since mid-December. The trend is upward.

     We are proud of wheat prices for holding on so well in a world that is nervous and conflicted, although the bakers will go on baking, tariff or no tariff. Factors with the power to move prices in either direction have become diluted or exhausted since November. Looking at the long-term wheat charts, it is getting so that we have to squint and tilt our heads to detect a trend. We are going to continue to monitor the boundaries of the sideways range, using Chicago wheat as a bellwether. From current trading around $5.55, that examination yields a lower edge around $5.26 and an upper edge about $6.17, so there is time to research and investigate.

     We observe the large trading funds as a categorical group (required to report their aggregate positions to the Commodity Futures Trading Commission CFTC each week). They are holding a net short position around 84,842 contracts as of the last report (see Weekly Chicago wheat chart below). This is an historically significant position that represents potential buying as they reach time and prices that trigger buying back (short-covering) those contracts, as they must eventually. It always takes a “triggering” move beginning with another factor, (Russian weather?...a Chinese agreement to buy?...etc). It’s a little like powder in the storeroom…nice to know its there.

     This is the time for which thoughtful and deliberate marketing plans pay for themselves. It is legitimate to hold wheat in storage when the market is flat, but storage and interest charges do not stop accumulating every month, so cash wheat held is not a “free” strategy. There are ways to move forward and reduce risk. Call your merchant.

Watch this channel for developments. It’s trackable. Let’s track it!

Market Bullets® Wednesday, March 12, 2025: Pre-Dawn

  Additional notes and quotes directly from the USDA WASDE Report on Tuesday:

     NOTE: The WASDE report only considers trade policies that are in effect at the time of publication. Further, unless a formal end date is specified, the report also assumes that these policies remain in place. U.S. Tariffs on Canada and Mexico have been suspended until April 2 for all products covered under USMCA, which include most agricultural products in the WASDE. Reciprocal tariffs are also scheduled to begin on April 2. However, until these are in effect, WASDE does not incorporate them into commodity forecasts. Despite U.S. tariffs being suspended, Canada’s retaliatory tariffs remain in place. These are accounted for in WASDE estimates and are assumed to continue. U.S. tariffs on China and China’s retaliatory tariffs on the U.S. are assumed to remain in place.

     WHEAT: The outlook for 2024/25 U.S. wheat this month is for larger supplies, unchanged domestic use, lower exports, and higher ending stocks.

     The global wheat outlook this month for 2024/25 is for larger supplies, higher consumption, reduced trade, and increased ending stocks.

      The report did not provide any stats that supported a continued rally. Opportunistic approaches with a view of the sideways range of wheat trade on longer-term charts may be the only game in town until the spring weather becomes dominant.

Stay tuned.

Market Bullets® Tues, March 11, 2025: Post-USDA Report Close

World Ag Supply/Demand Estimates (WASDE)

     The only surprise for for U.S. and global wheat was for a U.S. wheat ending stocks increase to 819 million bushels from 794 million last month (+3.1%). The pre-report average guess was 797 million, no shock, but not a positive influence. The global ending stocks estimate was also increased by around 92.6 million bushels, really just a tid at plus .009% (might as well say unchanged).

     U.S. corn ending stocks official estimate was 1.540 billion bushels, unch’d. Pre-report trade survey estimates had an average guess of 1.516 billion. Again no shock but mildly price negative.

     WASDE Soybean numbers put U.S. ending stocks unch’d at 380 million bushels. The average pre-report guess was for 379 million bushels, a very mildly price negative statistic.

     The bottom line for the March WASDE led to a market that reacted gently, but across the board downward, but as this data is fed to the AI monster models over the next few sessions, we may see some additional selling emerging from the big speculative group of traders, since there is no mandate for buying on the table in the short run.

     State wheat crop condition reports in the southern plains have declined a few percent with Texas now at 28% good to excellent, although it is still a long way to the bin. Oklahoma actually improved a tad, now 46% good-to-excellent from 35%, but the overall outlook has faded a few percent. This may be the only positive factor in the basket for the moment.

     Virtually all of the wheat market calendar spreads (Including Paris 11% milling wheat) display movement toward a greater carrying charge configuration, with deferred prices higher than nearby, a characteristic of a market with plenty of available wheat and/or tepid demand in short-term contracts.

     The first trades of the Wednesday session that begins on Tuesday evening were positive a few cents. Chicago +4, KC +5, MPLS +2. This is not unusual or even very meaningful, but at least is shows that the report was of small effect. Wednesday may end up being a slow session. The infant uptrend is still alive, but has yet to prove itself. The tripwire warning lines are still $5.26 (34 cents below current) followed by $5.14 (46 cents below current) in the leading Chicago futures contracts.

Stay tuned for more (we will attempt to avoid speculation about tariff negotiations and DOGE activities, as the mainstream media seem to have that gig locked up).

Market Bullets® Tuesday, March 11, 2025: Pre-Dawn

World Ag Supply/Demand Estimates (WASDE) due out 9:00 AM Pacific Daylight Time (UTC -8). Market comment will be available after there report.

Early trade on Tuesday morning had wheat down about -3 cents in Chicago Soft Red Winter (SRW), -5 Minneapolis Hard Red Spring (HRS) and -3 in KC Hard Red Winter (HRW). The USDA reports are not expected to yield any big surprises, but the if the pre-report survey estimates are off by any significant amount, there is always reason to be respectful of the reaction. Once the report is issued and digested, we will see if there is enough buying interest in wheat to continue to gain.

Stay tuned.

Market Bullets® Friday, March 7, 2025: Pre-Dawn                   

CORRECTION: World Ag Supply/Demand Estimates (WASDE) coming on TUESDAY, March 11th, 9:00 AM Pacific, 11:00 AM Central. Planting Intentions and Quarterly Stocks-In-All-Positions inventory reports will be out on March 31.

     Pre-report trade estimates for wheat expect a small increase in ending stocks for the 2024-25 marketing year ending May 31. The average guess of 797 million bushels is about 3 million bushels 1/3 of 1% higher than February’s estimate, not a market-moving idea. The range of pre-report estimates is 779 to 835 million.

     Corn and soybean pre-report ending stock guesses are both slightly lower, corn at an average of 1.516 billion bushels and beans an average of 379 million.                                                           

     AgriMer reports as of March 3rd the French soft wheat crop is rated at 74% good-to-excellent condition versus last year, same week at 68%. It was later in the season during harvest that the wet, cold weather conditions damaged and reduced the crop dramatically, to the lowest total in 40 years, some 27% below their 5-year average. It is likely that their production will rebound this year, a European wheat price negative.  

     Tariff work continues, with an emerging pattern of tightening followed by negotiations and easing. This pattern seems likely to dominate the news cycle for many months to come. The markets are becoming accustomed to the pattern. Changes to the global trade flow will take time, if the efforts of the Trump administration are to bear any fruit. Grains and other foods seem to be able so far to remain less affected. Nothing is certain.

     Very early Monday trade has both corn and soybeans slightly lower. Wheat is holding steady with a 6-cent advance at 2:30 AM Pacific Time. The very short-term trend for wheat in Chicago is positive, but “V” price bottoms are rare (see Daily wheat chart), so it would be normal for wheat to consolidate and retrace to test the recent swing lows. Unless there is a surprise in the WASDE on Tuesday, or another factor rises from obscurity very quickly, the pattern of range-bound trade will provide some marginal opportunities for marketing incremental sales. The market is well aware that it is the spring moisture pattern in Russia and the U.S. western plains wheat belt that will be the most potentially price moving factor.

     Watch the chart lows for a warning if they fail.

Stay tuned.

Market Bullets® Friday, March 7, 2025: Pre-Dawn                   

     Ukraine’s Odesa region deepwater ports on the Black Sea have resumed operations following a pause due to damages from Russian missiles. Not a surprise, and also mildly price-negative. 

     The Agriculture ministers of Bulgaria, Hungary, Romania and Slovakia would  like to eliminate or withdraw previously established preferential treatment of Ukrainian shipments of grains and to re-implement EU standards for agricultural products from Ukraine, according to the Hungarian Ministry of Agriculture. The impact of operational seaports and the ending of preferential programs for shipping Ukraine’s grains is possibly price-positive in the European trading arena, at least for a short time.  

Friday’s net change in Chicago Soft Red Winter (SRW) wheat did not change Thursday’s results, settling within the same trading range.

World Ag Supply/Demand Estimates (WASDE) coming on Wednesday, March 12th, 9:00 AM Pacific, 11:00 AM Central. Planting Intentions and Quarterly Stocks-In-All-Positions inventory reports will be out on March 31.

The global wheat complex has declined

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Market Bullets® Friday, March 7, 2025: Pre-Dawn                   

     Ukraine’s Odesa region deepwater ports on the Black Sea have resumed operations following a pause due to damages from Russian missiles. Not a surprise, and also mildly price-negative. 

     The Agriculture ministers of Bulgaria, Hungary, Romania and Slovakia would  like to eliminate or withdraw previously established preferential treatment of Ukrainian shipments of grains and to re-implement EU standards for agricultural products from Ukraine, according to the Hungarian Ministry of Agriculture. The impact of operational seaports and the ending of preferential programs for shipping Ukraine’s grains is possibly price-positive in the European trading arena, at least for a short time.  

     The markets were already a bit uncertain, and then along comes a Tariff Parade, so the trade is standing and watching the clowns on stilts and the jugglers while listening to the brass band play “76 Trombones. We have already seen some of the finest political theatrics in recent memory. The wheat market is willing to pause for a look at what seems to be a potential for at least stable trade, but we have to take this day by day. There is no use in getting all steamed up about specific issues, so we are just going to watch the chart patterns develop and try to be matter-of-fact pragmatic about the marketing plan.

     We still have the base of the big picture just below the current range of wheat price trade as a backstop. If that line is broken, we will make at least a decent token sale of wheat with the intention of a re-buy at some point (but only if there is a buy signal of some kind – there is little sense in buying back immediately without regard to favorable trend support).

     PNW Soft White Winter (SWW) quotes have been resilient, even positive in the face of a despondent Chicago market. An old bit of market wisdom says, “the slowest declining grain market in an overall negative environment is likely to be the strongest once a rally appears.”

     Call your merchant and discuss the practical aspects of the pricing tools. There may be some advance prep to be done.

     Meanwhile, the outside markets are sometimes good indicators of what is really going on behind the curtain. The U.S. Dollar is declining rapidly, although not into any historically new territory, just a quick move down. This makes our wheat more competitive. Some say the New Orleans Hard Red Wheat market is getting more attractive in the global markets.

     Copper is rising to its highest since last May. The red metal contract is a good proxy for global market health, as it is always at its strongest demand when there is lots of construction and manufacturing going on. Data Centers being built are big copper consumers, with thousands of miles of wire rolling out.

      Home Depot stock is trading below its recent all time highs and has assembled a large “head and shoulders” top chart formation. If HD drops below $378 per share, there is a technical measurement that projects a decline to about 48 dollars lower. These old-school patterns are surprisingly effective, so this pattern is worth following.

     Natural Gas is rising, which puts some upward pressure on anhydrous ammonia, as Nat Gas represents 60% to 70% of input costs on production of that nitrogen fertilizer source…Another pattern worth following.

     We also see some of these outside markets as indicators of global market health and early warning signs of any serious problems.

     The wheat price trend is short-term negative, with a small sign of life being displayed. Keep reading the trends, if there are any, of the global tariff reset. The large trading fund money is watching closely. Surprises may be violent. This period will probably make the history books.

     At least it is not dull!

Stay tuned. We will see it in the charts.           

Market Bullets® Thursday, March 6, 2025: Pre-Dawn                   

     Ukraine’s Odesa region deepwater ports on the Black Sea have resumed operations following a pause due to damages from Russian missiles. Not a surprise, and also mildly price-negative. 

     The Agriculture ministers of Bulgaria, Hungary, Romania and Slovakia would  like to eliminate or withdraw previously established preferential treatment of Ukrainian shipments of grains and to re-implement EU standards for agricultural products from Ukraine, according to the Hungarian Ministry of Agriculture. The impact of operational seaports and the ending of preferential programs for shipping Ukraine’s grains is possibly price-positive in the European trading arena, at least for a short time.  

     Some of the buffalo are standing and looking across the river. Some are crossing, but the herd leaders (probably the older females) have not committed themselves. As the tribe watches them from the high ground, it seems that the herd wants to cross. What do you do if you are the leader of the hungry hunters? If you thought, “Hold still and watch. If the herd moves across, we can get ahead of them on the far side of the valley. If they begin to move away, we can catch them between us and the river.” you are in about the right place and the plan is good. “Hide and Watch”.

     The Tuesday gains held overnight. Wednesday netted some slight gains above that level. It smells like this is opportunistic bargain hunting in the wheat market. The first retracement target of the recent violent move downward is at about $5.65 in Chicago May futures. The second target above that is about $5.87.

     Due to the power of the downward move, it is unlikely that it will be simply erased, as there is no consolidation or other base yet established from which to measure. “V” bottoms are somewhat rare. The upward move that is about to be gauged is only a temporary, contra-trend idea at this point. The real untapped energy here is to the downside if the long-term lows are cracked, about $5.14, some 35 cents below current trading. Meanwhile, its day-by-day.  

     Longer-term, there is no large fundamental shift on the horizon that has the potential to draw wheat prices up above $6.17 or higher, unless there is a real, undeniable spring drought in both Russia and the western wheat belt in the U.S.

     Political posturing or tariffs are not the kind of variable that has great positive wheat price potential.  A hot war obliviates all market bets, positive or negative, and is not computable in advance. If there is to be a legitimate rally of more than 50 cents, it has to come from Mother Nature. So we have to learn to live with opportunistic marketing in a less-than-a-dollar range. It can be interesting, but stressful. A good, thoughtful, pragmatic marketing plan with a scheduled scale and defined criteria for selling is our best defense. Its best to do the thinking and writing of such a plan when there is little or no pressure (before it becomes emotional). Of course, you already knew this; just a lil’ reminder.

     Syria has issued its first tender for milling wheat since Assad departed. At least the government offices are open. It will be interesting to see from what source they buy. Russian offers are not grossly discounted in the current market, so the game is on.

      The tariff parade is marching on, with a gratifying number of national leaders paying close attention to what Trump is saying. Its more like a reset than a war.

     The short-term trend is negative, but a bounce is underway which should be used to measure the strength of the market. The long-term pattern is really flat (see weekly charts below). No reason to get excited, just watch the lower boundary and be patient on the upside.

Stay tuned. The herd is unlikely to stay here on the riverbank for very long.

MarketBullets® Wednesday, March 5, 2025: Pre-Dawn                   

     Ukraine’s Odesa region deepwater ports on the Black Sea have resumed operations following a pause due to damages from Russian missiles. Not a surprise, and also mildly price-negative.  

     The Agriculture ministers of Bulgaria, Hungary, Romania and Slovakia would  like to eliminate or withdraw previously established preferential treatment of Ukrainian shipments of grains and to re-implement EU standards for agricultural products from Ukraine, according to the Hungarian Ministry of Agriculture. The impact of operational seaports and the ending of preferential programs for shipping Ukraine’s grains is possibly price-positive in the European trading arena, at least for a short time.  

     Australia’s wheat crop estimates were increased by 60,000 metric tonnes, now 31.9 million tonnes. This is not a market-changing increase, but likely will cap further decrease expectations as harvest winds down in Australia.

     China is preparing to set tariffs on imports of U.S. wheat, among other reciprocal tariffs, as the battle to reduce international trade begins in earnest. The impact on U.S. wheat prices is unlikely to be noticeable, as we were not selling much wheat to China, anyway.

     The impact is psychological at this point, and fascinating to boot, as analyzing the Trump administration’s negotiations and the international responses generated is becoming a national pastime.

     Part of the force behind the liquidation of wheat positions is the loss of the massive support from corn price strength. Wheat had borrowed quite a bit of positive trading energy from corn over the last month, and corn is quite a bit more sensitive to tariff effects, especially with China.

     Wednesday early AM trade had both wheat and corn up 5-7 cents, while beans were also up about 8 cents. This little bounce will likely get sold hard by traders looking for an exit opening. If the gains hold into Wednesday’s close, it will begin to shape a little better tone, but the trend is negative until and unless the buffalo actually cross the river.

      PNW white wheat bids have declined by about 25 cents per bushel since the Feb 19-20 highs in Chicago wheat. Cash movement has slowed.

     The charts are the only rational tool in this kind of “news-wire driven” markets.  The attempt to make logical and practical judgements about wheat pricing in this environment is frustrating and uncertain at best, expensive at worst.

‘Tis all trackable. We shall track it!

MarketBullets® Tuesday, March 4, 2025: Pre-Dawn                   

     Today is the 10th wheat trading session since the high of $6.21 on February 18th.  The front futures month has dropped 79 cents in that time, the longest unbroken string of downward price movement since the first half of June, 2024, only that -$1.14 ended at the level where this one began, around $6.07.

     With decelerated exports out of Russia, a weaker U.S. Dollar making U.S. origin wheat a little less expensive, and the net price decline for U.S. origins, the downward pressure is less than it was a week ago, but there is no sign of any kind of buy signal that could spook the trade into buying. The market is very close to long-term lows (less than 30 cents on the weekly Chicago chart). This proximity to such key levels is usually a kind of psycho-magnetic zone for most markets, a little like when you stand on the top of the grain tank and it feels like your heels are on the edge of the long drop down. The decisions of traders in this kind of setup is affected, as would-be sellers realize that the tested bottom is near, and buyers are watching and holding. The failure of those long-established price levels could trigger a strong selling rush. The fundamentals of supply and demand are not the primary motivator here; it is mostly Fear of Missing Out (FOMO).

     This market is seeking a reason to buy an “oversold” market. It is a day-by-day process.

     For most marketers, it is a holding time, but the trend is against any buy or hold. That is why incremental sales are so effective. Selling a low is irritating, even painful, but when that low is transformed into a relatively high price in the rear-view mirror as a downtrend rolls on, the wisdom of small, serial sales becomes clear. Call your merchant and review ways to set a floor on price, or a plan for a re-buy when the buy signal is finally detected (It will come eventually).

     We will see the change on the charts first.

Stay tuned, there is another chapter.        

MarketBullets® Monday, March 3, 2025: Pre-Dawn                   

     Wheat Futures in Chicago steady to up 2 cents very early Monday morning. KC Hard Red Winter (HRW) up 2½ and Minneapolis Hard Red Spring (HRS) up 1 cent.

     The last couple of sessions for wheat were excessive in volume and negativity. Chicago  thumped to a close right at the 78.6% retracement line. There were no motivating headlines or new weather reports, only there was enough momentum to push the funds and some cash sellers into liquidation.

     This market has taken a lot of downside risk out of the wheat contract prices, and has returned to the same values that were trading in late January. There are still technical prices below the current trade that have been supportive (revealed willing buyers) in the past couple of months, but the market seems exhausted.

     Paris wheat quotes are showing the equivalent of negative 3-5 cents per bushel Monday morning. Our chart will be updated “end-of-day”.

     Suddenly, with government employees scrambling for balance with once solid employment ground shuddering under their feet, the tariff talk has been tossed into the back seat. And then we have the Zelenskiy/Trump political theatre show. The plain old wheat market is struggling to retain trade attention.

     The week ahead seems likely to be turbulent, which is rarely a price-positive environment, but the market has already reduced exposure. The trendline is still steady to slightly positive on the weekly and monthly charts, but the short-term is not giving a buy signal.

Stay tuned.