MarketsFarm — The three to five inches of rain received Wednesday in Kansas and Oklahoma have put pressure on Kansas City and Chicago wheat prices on the Chicago Board of Trade (CBOT), according to broker Ryan Ettner of Allendale Inc.
Added to that, Statistics Canada’s (StatCan) report on prospective plantings, also received Wednesday, has weighed on prices for Minneapolis wheat.
The StatCan report, which projected Canadian farmers seeding 26.97 million acres of all wheat was having a moderate effect on Minneapolis prices, Ettner said.
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“The Kansas City wheat is pretty much focused on the Kansas and Oklahoma rain event that’s occurring right now,” he said. “For many people in that area that’s the best rain seen in over a year.”
Going into the week of April 24, the weather forecast was used to ‘pre-sell’ the rain, thus the July K.C. wheat contract lost about 70 cents per bushel before the ground was close to being wet (all figures US$).
Then as Russia issued more threats about pulling out of the Black Sea Grain Initiative export deal, Ettner said markets weren’t really paying too much attention to the situation.
“I don’t know how many times Russia has threatened that over the past year. You hear the threats every single week,” he said.
Constant sabre-rattling can still generate a little bit of traction, he said, but the threats very likely won’t be taken more seriously by the trade until closer to the deal’s May 18 expiry date. Even then, he suggested the wheat complex as well as CBOT corn would get a little bit of a bump upward.
In the meantime, the rain in the U.S. Midwest and southern Plains is unlikely to slow planting progress to any significant measure. Ettner said corn and soybean planting are ahead of the five-year average.
The U.S. Department of Agriculture (USDA) placed corn planting at 14 per cent complete as of Sunday, three points above the average and six ahead of a year ago. Soybeans were estimated to be nine per cent finished, five points up on the average as well as where planting was this time last year.
Ettner theorized the rain could slow spring seeding to the five-year averages when the next crop progress report is made next Sunday (April 30).
With USDA set to publish its next supply and demand (WASDE) report May 12, the broker said the trade will be looking forward to the department’s first round of numbers for the 2023-24 crop year. The trade will be busy positioning itself as that day approaches, he said.
— Glen Hallick reports for MarketsFarm from Winnipeg.
