CNS Canada — Spring wheat futures at the Minneapolis Grain Exchange hit fresh contract lows over the past week, and are seen as likely to have more room to the downside as North America’s spring wheat harvest is just getting started.
However, the Chicago and Kansas City winter wheat contracts are due for a post-harvest rally after dropping steadily for the past three months.
“The harvest is done in the winter wheat areas, and we have not yet seen a post-harvest rally,” said Randy Martinson of Progressive Ag at Fargo, N.D., adding that futures now “need to encourage producers to plant winter wheat.”
As far as Minneapolis spring wheat futures are concerned, Martinson said early expectations are for record yields and good quality, which will limit the incentive for prices to rise until October.
From a chart standpoint, he said Minneapolis wheat had about 25 or 30 more cents to go to the downside, with US$5.85 per bushel a possible target in December.
Meanwhile, Chicago soft winter wheat and Kansas City hard red winter may only have about 10 cents of downside potential before stabilizing.
MGEX December wheat settled Thursday at US$6.1625 per bushel, Kansas City December wheat (now traded at the CBOT) settled at US$6.2325 per bushel and the CBOT December soft wheat contract was quoted at US$5.5275.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.