Prices 7/7/17
Well what goes up must come down and that was certainly the case in US wheat futures last night. The reason, well you could question that reality took hold but that is seldom the case in futures trading.
One market wire is implying that is the case though, well not directly and as bluntly as that but with the heading of the Agrimoney article stating “Wheat prices tumble amid talk of “incredible farmer selling” that is what it is implying is it not.
Well there you have it, the futures market is not just a play ground for the speculative trader, hedge fund and consumer. It can actually do what it was designed to do way back in the late 1800’s and that is to help trade physical grain.
As profit taking took hold, yes the market was overbought and I have no doubt there were a whole bunch of stop loss orders following this thing higher, spring wheat futures were smashed for six, well 47.25c actually, about AUD$23 to you and me.
Farmers across Kansas were big sellers of physical grain this week.
Next week’s USDA report is going to have to get the US spring wheat crop pretty close to right. There are trade and analyst estimates ranging from 12mt to 10mt and some even a little lower. Yesterday’s crop progress report had spring wheat back to 37% good to excellent, -3%. N.Dakota the major state is at 41% G/E with 78% in head, I’m leaning towards a crop @ 10mt, +/- 200kt.