Wheat Futures Slip as Traders Await Fresh Supply Data

Key Moments:

Early Tuesday Trade and Monday Recap

Wheat futures began Tuesday’s morning session under pressure, with losses between 3 and 5 ½ cents as the market digests fresh fundamental data and positioning ahead of new supply estimates.

On Monday, price action across the wheat complex was mixed. Winter wheat contracts held firmer overall, while spring wheat futures moved lower. Chicago SRW futures ended Monday with gains ranging from fractional moves to 4 cents. Total open interest in Chicago wheat declined by 2,230 contracts, driven largely by a sizable reduction of 18,038 contracts in the September position due to roll activity.

KC HRW futures were mostly fractionally to 2 ¾ cents higher at Monday’s close, with the September contract down ½ cent. Open interest in KC wheat increased by 3,000 contracts. MPLS spring wheat futures were weaker, closing Monday between 1 ¼ and 9 ½ cents lower across most listed contracts.

U.S. Crop Progress and Condition

The latest NASS Crop Progress report indicated that the U.S. winter wheat harvest reached 91% completion by Sunday, bringing it in line with the normal seasonal pace. The spring wheat harvest advanced to 24% complete, running ahead of the 19% 5-year average.

Spring wheat crop conditions deteriorated, with the share rated good to excellent falling 4 percentage points to 51%. The Brugler500 index measurement for spring wheat declined 9 points to 339, reflecting the weakening condition ratings.

Export Inspections and Shipping Pace

Monday’s weekly Export Inspections report showed that wheat shipments totaled 421,277 MT (15.48 mbu) for the week of 8/6. That volume represented a 24.36% increase compared to the previous week and was 1.55% higher than the same week a year earlier.

Japan was the top destination during the reported week, receiving 81,506 MT. Mexico followed with 78,035 MT, while the Philippines took 66,000 MT.

For the current marketing year to date, wheat export shipments stand at 3.332 MMT (122.4 mbu), which is 24.56% below the corresponding period last year.

Upcoming USDA Data and Supply Expectations

NASS is scheduled to publish updated wheat production figures on Wednesday in the monthly Crop Production report. According to survey results cited from Reuters, analysts on average expect total U.S. wheat production at 1.525 bbu. If realized, that would reflect an 11 mbu reduction from the July projection.

Within that total, winter wheat output is anticipated at 981 mbu, representing a 9 mbu decline from last month’s estimate. Spring wheat production is projected at 468 mbu, which would be 7 mbu lower than the previous outlook. U.S. ending stocks are projected at 715 mbu, implying a potential 7 mbu decrease from last month’s level.

Russian Supply and Export Outlook

Outside the U.S., Sovecon estimates Russian wheat exports in August at 3-3.4 MMT, which would be below the 4.5 MMT shipped in the same month last year. IKA places the Russian wheat crop at 90, trimming its outlook by 0.5 MMT from last month.

Futures Performance Snapshot

Recent settlement levels and early Tuesday price indications for key wheat futures contracts are shown below:

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.