USDA Crop Progress Report Halts Rally in Wheat Futures

Wheat futures had rallied into today’s USDA crop production report, but the reality of ample global supplies and a stronger dollar may have thrown cold water the temporary relief rally. Wheat futures are currently down .07 cents at the Chicago Board of Trade just over an hour after the big report.

It appears speculators had been readjusting their positions yesterday ahead of today’s closely followed “supply & demand” report after rallying about .40 cents from the February 1st low. The consensus was US wheat (futures) prices had dropped to an attractive level that would spark demand for US supplies. Wheat is the USA’s fourth biggest cash crop, behind corn, soybeans, and…”hay.”

Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental analysis insight regarding the current wheat futures situation by stating, The sentiment well before today’s big report was wheat was definitely oversold, and a correction (higher) was due.” Craney added, It’s hard to overcome the fundamental situation of plenty global wheat supply and a recent strong US Dollar pricing out our domestic supply.”

The trend for wheat futures is down – technically, fundamentally, and seasonally. This relief rally we have seen this past week has been what I had been looking for to re-enter the short side of wheat futures (albeit an early entry for me).

ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.