Price action: September SRW futures rose 32 1/2 cents before settling at $6.74 1/4. September HRW futures led the complex higher, rallying 49 3/4 cents before closing at $8.46 1/4. September spring wheat futures rose 48 1/4 cents to $8.57 1/2.
Fundamental analysis: Wheat futures surged today amid corrective buying after plunging over a dollar in the prior six trading sessions. Spring wheat condition ratings continue to deteriorate despite rains in the northern Plains over the past week, a bad sign potentially indicating crops have irreversible damage. USDA now has its spring wheat crop rating at 48% “good” to “excellent,” down two points from the previous week. On our CCI, the spring wheat crop fell another 4.8 points to 333.5, which was 34.9 points (9.5%) lower than last year.
Heavy rain continues to fall over Kansas and Oklahoma, delaying harvest and raising concerns over crop quality. Excessive rain and heat can lead to head sprouting, which would likely not affect the futures market, but would affect local cash markets. World Weather Inc. says “showers and thunderstorms are expected to continue today through Saturday from Nebraska to the Texas Panhandle with a brief break in the rain Sunday and Monday.” Harvest is already off to the slowest start since 2019 and rain shows no signs of letting up anytime soon.
Technical analysis: September SRW futures surged on corrective buying, although Friday’s high pared gains. Price is now looking to break either below the June 14 low of $6.36 3/4 or above the June 30 high of $6.80 3/4 to determine the next leg of this move. A break higher will target 100-day moving average resistance at $6.94 before the recent high-close at $7.52 3/4. Bears are looking to take out support at $6.36 3/4 before targeting further support at $6.25.
September HRW futures remain in a volatile sideways range. Price settled just below the 200-day moving average at $8.49 1/4 today which will act as first resistance. Last week’s high of $8.88 1/2 is the bull’s ultimate target, a daily close above which will target the May 17 high at $9.02. Bears are looking to defend the 200-day moving average and break price back below 40-day moving average support at $8.21 3/4 before targeting Monday’s low of $7.87 1/4.
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