Price action: July SRW wheat futures fell 12 cents to $6.27 1/2, near mid-range and hit a four-week low. For the week, July SRW fell 51 cents. July HRW wheat futures lost 12 1/4 cents to $6.65 3/4, near mid-range and hit a nearly four-week low. For the week, July HRW fell 43 cents. July spring wheat futures fell 12 1/4 cents to $6.94 1/2 and gave up 45 1/4 cents on the week.
5-day outlook: Friday’s technically bearish weekly low closes in winter wheat futures suggest follow-through chart-based selling pressure early next week. However, the winter wheat futures markets are also short-term oversold and could see corrective bounces next week, given July SRW and HRW futures prices have now closed lower for eight sessions in a row. Focus next week will be on the weekly crop progress reports on Monday and the monthly USDA supply and demand report on Wednesday.
World Weather Inc. today said that in U.S. HRW country a mostly favorable mix of rain and sunshine will occur in the next seven days. In the northern Plains drying is expected in the western half of the region in the next seven days “which will be great for fieldwork, but will also raise the need for more rain to maintain favorable crop development.”
30-day outlook: The U.S. winter wheat harvest’s more rapid pace is likely to produce more commercial hedge pressure in the futures markets in the coming weeks. The Texas and Oklahoma HRW harvests were 33% and 22% complete, respectively, as of June 2. Given the good condition of the corn and soybean crops, wheat market bulls can’t rely on spillover support. North Dakota spring wheat plantings will likely top forecasts. The strong initial ratings for the HRS crop also suggest improved yields.
90-day outlook: Today’s strong surge in the U.S. dollar index after the stronger U.S. jobs report bodes ill for the wheat market bulls in the near term. USDA Thursday reported weekly U.S. wheat export sales with net old-crop reductions of 229,000 MT and new-crop sales of 616,900 MT. While new-crop sales exceeded pre-report expectations, a continued rebound in the greenback on the foreign exchange market would make U.S. wheat prices less competitive on the world trade markets.
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