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.

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.  

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

PS – Noticeables:  <Diesel>    <Gold>     <US Dollar Index>    <Ruble VS Yuan>    <2-Yr T-Note> <S&P>

Good hunting!

   See “Previous Updates” in Top Menu for historical record of commentary.

North of Prescott, Washington

This chart updated end-of-day only

Paris Milling Wheat

See DAILY Chart for Paris Wheat click here

This Chart updated end-of-day only

The Harvest Crew

“Agriculture is our wisest pursuit because it will in the end contribute most to real wealth, good morals and happiness.” - Thomas Jefferson in a letter to George Washington, April 30, 1787.

“Its the 70th year in a row of unusual weather!’ - Winston Mader (1930 - 2016)

“Prayers Work Best When Your Trades Are With The Trend“ - Larry Williams

“When things go wrong, you'll find they usually go on getting worse for some time; but when things once start going right they often go on getting better and better.” - C.S. Lewis, The Horse and His Boy.

“It Don’t Mean a Thing if it Ain’t Got That Swing” - Duke Ellington - 1932

“If I am worth anything later, I am worth something now. For wheat is wheat, even if people think it is a grass in the beginning.” – Vincent van Gogh.

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