The big trading money Funds have accumulated massive shorts in Chicago and KC, 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 trends in the “COT”.
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.
There are useful updates of information on <Israel/Iran> and <Ukraine/Russia> at this site: <ISW>
Market Bullets® Friday, June 13, 2025: Close
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 Iran has “withdrawn from talks with the U.S. on nuclear limits”.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…Israel and Iran will dominate the coffee-talk and the news wires for a couple of days now.
See: <Crude OIl>, <Diesel>, <Global Dry Freight> and <Gold> charts for developing potential.
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
Weekly Chicago wheat chart comment as of Friday March 21, 2025
The weekly chart is a comparatively calm and rational way to view trends than the daily, and maybe the best low-noise perspective for trend-following. The present pattern (and the trade) has become dependent on a 40-Week-long flat support-price zone around $5.14 - $6.17, the failure of which would open a trap-door to long-term lower price zones. In the last 91 weeks, there has been one (1) 5-week period ventured above $6.17 to $7.20 in the spring of 2024, which promptly reverted to the mean at $5.80.
When in doubt, a reversion to the mean is always a decent blind bet. The only question is not if it will happen, but when. Sometimes it takes quite a while, although at present the price is within 15 cents of the 91-week mean.
Comment as of Friday Mar 21, 2025
Hard Red Winter (HRW) remains in a flat pattern that allows easy ID if it changes. With the low side at $5.27 and the high side at $6.33, KC had been getting a little sympathy support from corn contracts, but now that source of energy has retracted and is awaiting tariff reactions from some of the big buyers. The green, 61.8% retracement line of the entire downward move since August 2024 seems very far away at about $8.52. The short-range 61.2% retracement of the move down from the October high is more achievable, near $6.72, about $.88 cents over the current price. Any close above $6.33 will alert the short-sold buyers to buy-to-cover. The downside is the flat bottom of this boat @5.72. If that fails, we will have to recalc the whole game.
Achieving the targets each represent a marketing opportunity, especially if the price gets there and then begins to falter. Contra-trend bounces may offer tradable movements, but trading against the established market trend carries extra risk. The main trend channel is still flat to negative.
This chart updated end-of-day only
Paris Milling Wheat
This Chart updated end-of-day only
Comment as of Friday March 21, 2025 Click Here for Paris Milling Wheat Chart
Minneapolis Hard Red spring is trading just 15 cents or less from its 42-week down-trending mean line. The range path is from $5.63 to $6.55 and is now 24 weeks old. The base is maturing, so a break-out in either direction represents a significant change and will likely trigger more vigorous trading in the direction of the breakout. The targets provide some expectations, but the main, long-term trend line remains negative.
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.
Scroll down Below Text for Charts of Weekly Chicago SRW - Weekly KC HRW - Weekly Mpls HRS
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<Paris Milling Wheat Daily> <U.S. Dollar Index Monthly> <WTI/Brent/Urals Crude>
Diesel Daily> <Wheat Spreads> <Gold> <Nat Gas> <Interest Rates>
<Commitment of Traders> <Carbon> <Special Info Item>
<Weekly Ruble/Yuan> <Where Are We?> <Box-o-Rox (BoR)> <Fibonacci Spiral>
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Base (non-annotated) Charts Courtesy of Genesis Trade Navigator.
Chicago Soft Red Winter (SRW) Wheat Futures in 30-Minute Candles