4/5/21 Prices

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As Chicago futures are fundamentally supposed to converge with cash values as they near expiry we have seen some decline in values overnight. Futures may well be a little over cooked when compared to cash prices and the May contract should begin to reflect that over the next week or two as it goes off the board. Look at the July slot for futures direction from here on in.
Cash wheat values out of the Pacific North West of the USA show Club white wheat at about US$7.50/bu. On the back of an envelope this could compare to a number of roughly AUD$345 Newcastle port taking the current ocean rates and AUD/USD exchange rate into account and using Japan as a destination. Currently we see AUD$305 for old crop APW1 and AUD$316 for new crop at Newcastle.

The weekly US crop progress report shows corn planting advancing at a faster rate than the 5 year average, now 46% in vs the 5 year rate of 36% but it’s pretty close to this time last year, when it was 48% sown.
Kansas wheat is now 12% in head (5yr 27%), this is a little behind last year and is probably a result of the relatively cool spring to date. Prior to the report the trade were expecting to see a reduction in winter wheat quality, to about 48% G/E. The report shows the G/E rating now -1% to 48%, so as expected. The trade also estimated spring wheat sowing to be about 48% done, the report came in at 49%. So there is no real support for wheat in the weekly crop progress report. When the report shows spring wheat condition rating it will be more interesting.
Technically CME July wheat futures are still over bought but slipping, one might expect to see more pressure than support from here.

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