Wheat Futures Diverge as Chicago Leads and Kansas City Lags

Key Moments

Market Overview

Wheat futures were mixed early on Tuesday, with Chicago soft red winter (SRW) contracts showing the firmest tone and Kansas City (KC) contracts trading on the weaker side. This followed a higher close across the wheat complex on Monday, even as export data came in underwhelming. Support from strength in corn and soybean markets helped underpin wheat prices.

On Monday, Chicago SRW futures settled between 11 3/4 and 15 1/2 cents higher. Open interest in Chicago wheat increased by 2,692 contracts. Overnight, there were 3 deliveries issued against Chicago wheat, along with 1 delivery against July KC wheat.

Kansas City hard red winter (HRW) futures ended Monday’s session 7 1/2 to 12 3/4 cents higher, with open interest in that market rising by 5,693 contracts. Minneapolis spring wheat futures gained 8 1/2 to 11 1/4 cents on the day.

Crop Progress and Condition

NASS Crop Progress figures showed that 59% of the U.S. winter wheat crop had been harvested by Sunday, placing harvest 8% ahead of the normal pace. Condition ratings for winter wheat held steady at 26% good/excellent, with the Brugler500 index ticking up 1 point to 262. This was the final condition rating for the winter wheat crop.

For spring wheat, 54% of the crop was reported headed, matching the 5-year average pace. Spring wheat conditions were rated 57% good/excellent, down 2%, and the Brugler500 index for spring wheat slipped 1 point to 354.

Export Inspections and Demand

The weekly Export Inspections report showed wheat shipments of 133,652 metric tons (4.91 million bushels) for the week of 7/2. That total represented a 66.38% decline from the previous week and was 74.44% below shipments from the same week a year earlier.

Mexico was the largest reported destination at 60,524 MT, followed by Ecuador with 35,224 MT and Colombia with 29,088 MT. Cumulative shipments for the marketing year stood at 1.51 MMT (55.3 million bushels), which was 19.36% behind the same point in the prior year.

Positioning and Commitment of Traders

A delayed Commitment of Traders report from the CFTC indicated that managed money accounts reduced their net short position in Chicago Board of Trade wheat by 2,176 contracts, leaving them net short 69,030 contracts as of last Tuesday.

In KC wheat, speculative traders shifted back to a net long stance of 6,910 contracts, a weekly swing of 8,195 contracts.

Current Futures Snapshot

Wheat futures prices and intraday changes were as follows:

Disclosure

On the date of publication, Austin Schroeder did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.