As we mentioned in the corn segment, spring flooding in MO, AR, IL, IN and KY may have placed 5% of this year's wheat crop at risk. Those acres could switch to corn acres this spring if they can dry out in time. Monday, Turkey has launched a tender to buy 250,000 tonnes of wheat. The positive news is the break in price has lured foreign demand back to the US, despite firming transportation cost from the US to overseas markets. Present domestic wheat stocks of 242 million bushels are the lowest dating back to 1945/46. Domestic ending stocks to use of 10.2% are down 11.1% versus year earlier levels and compare to a five-year average of 24.22%.
New crop wheat resistance is now 10500, with support at 9700 versus the July CBOT soft red winter wheat contract. We see no reason to hedge new crop above the 65% level we currently have on for now. Fundamentals remain supportive and the contract is long-term technically bullish. If 8790 gets broken, it could be a bull to bear momentum price shift at that point.
According to the Texas Statistics Service, in its weekly wheat condition report released Monday, they estimate the good to excellent conditions are at 16% versus 16% a week earlier and compares to one year ago levels of 58% good to excellent. According to the Oklahoma Statistics Service, in its weekly wheat condition report, also released Monday, they estimate their good to excellent wheat conditions at 43% versus 41% a week earlier and compares to one year ago levels of 67% good to excellent. Finally, according to the Kansas Statistics Service, its weekly wheat condition report released Monday estimates the good to excellent conditions at 48% versus 42% a week earlier and compares to one year ago levels of 72% good to excellent.
July CBOT SRWW has immediate technical support at 9700, and resistance at 10500, with the immediate trend as down. July KCBT HRWW futures have technical support at 10000 and resistance of 10900, likewise the immediate technical trend is down. July MGEX Spring Wheat futures have technical support at 10800 and resistance of 12100, and you guess it, the immediate technical trend is down.
Technically the new crop wheat's immediate trend is down. Long term, Allendale remains supportive to new crop wheat futures based on how weak 2008 winter wheat conditions went into dormancy last fall. That along with the fact that the days of old crop stocks on hand, numbers 37, the lowest dating back to 1999-2000. Allendale has written new orders to buy July wheat at all three exchanges, contact an Allendale representative to assist you in your marketing needs in this explosive wheat market.
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