FOR THURSDAY: (6/1) Usually meats and grains are lower on Thursdays but not clear on grains this week. First-the-month fund buying may lift some oversold conditions for bargain hunters. Hogs aren’t done enough to sell and cattle are too strong to sell.
JULY CHICAGO WHEAT (electronic ok)
TODAY’S COMMENTS: (6/1) Moving stops down as we’re running out of time. We still think seasonal selling pressure will trump any minor weather concerns. Still, we want to get out at 424.50 and have move stops down tightly. Wet conditions on the central and southern Plains continue to threaten quality of the hard red winter wheat crop, helping send July Minneapolis futures towards February highs overnight.
FUNDAMENTALS: USDA’s first ratings for spring wheat were below trade guesses. The government said 62% of the crop was in good or excellent condition, with the overall condition in line with where 2016 finished. That suggests potential for decent production, with our model putting the average yield between 48 and 49 bpa. USDA also said 96% of the crop was planted, with 79% emerged, both 5% above average. States in the Pacific Northwest lagged behind those on the northern Plains.
OVERALL: Seasonal pressure is always on winter wheat into late May and it can sometimes extend into mid-June. Three waves down on the weekly continuation chart project 3.99 and the USDA has given 3.85 as the lower end for where prices may go and they figure the market won’t get above 450. First place July wheat will fall is 418 and then 410-2.
CYCLES OVERVIEW: June 3 and 5 cycle highs.