Price action: December SRW futures lost 7 3/4 cents and settled at $5.67, though they still gained 15 1/2 cents on the week. December HRW future tumbled 11 1/4 cents to $5.77 1/2, but the Friday close still represented a 12 1/4 cents weekly rise.
5-day outlook: Wheat futures traded similarly to corn today, firming this morning before outside markets dragged prices lower. The last couple days of selling pressure have allowed wheat futures to cool off after climbing for six consecutive sessions. The recent uptrend is still very much alive and well and bulls managing to keep prices above 40-day moving average support today indicates that more upside could still be on the table. Next week’s reports from USDA are likely to show little change from August. September is historically more of a bullish month for wheat which has played out so far. The coming week will help show whether the recent rally is transient or if it has longer legs.
30-day outlook: The Small Grains Summary released at the end of September will give final production for 2024-25 and will include any revisions for winter wheat and an updated spring wheat crop estimate. Basis levels have jumped for high quality spring wheat in the past month in Minnesota, which could be due to a potentially lower quality crop, smaller than expected production or simply higher demand. The reports at the end of the month should help determine what is driving HRS prices higher, either production or demand, which would be noted in the quarterly Grain Stocks report from USDA.
90-day outlook: As the winter months come into focus, the market will be largely focused on demand. Who wins the upcoming election could have an impact on trade. China is increasing trade tensions with several of their trading partners. While they do not purchase a particularly large amount of U.S. wheat, Heightening U.S.-China tensions would ultimately bring struggle across the agricultural complex. Exports are keeping the wheat balance sheet from drifting too high in the new-crop marketing year and if exports do not live up to current expectations, wheat prices could again struggle to find a bottom.
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