Wheat Seasonal Trade
18 responses | 0 likes
Started by mikempt - Sept. 2, 2024, 9:04 a.m.

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By metmike - Sept. 2, 2024, 2:18 p.m.
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Thanks much, Mike!

This has actually been a CONTRA seasonal move lower by wheat the past 2+ months!

In tandem with plunging C and S prices during that same time frame as they developed into record supply crops and helped pull wheat down.

Most recent 20 year seasonals:

https://planetarytrader.substack.com/p/wheat-seasonality



Previous seasonals prior to 2007.

https://www.seasonalcharts.com/future_farmprodukte_wheat.html

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Understanding Seasonality in Grains

https://www.cmegroup.com/education/courses/introduction-to-grains-and-oilseeds/understanding-seasonality-in-grains.html


During the planting months, spring for corn and soybeans and fall for winter wheat, the source of grain that is available for sale or purchase by end users is from the crops that were harvested during the previous harvest season—the old crop.

On the other hand, during the harvest months, typically July for winter wheat and November and December for corn and soybeans, the newly harvested crop comes to market and supply is higher—hence, the new crop.

Each grain commodity has one new crop futures delivery month and all others are old crop months.

When a new crop is harvested, there is once again a higher level of supply. This is why many of the grain markets tend to reflect their lowest seasonal prices during the new crop trading month.

Wheat markets have a tendency to decline between spring and the July harvest, then begin to rise from these harvest lows into fall and winter.  

By metmike - Sept. 2, 2024, 2:35 p.m.
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Wheat, even more than soybeans and corn(that have 2 main suppliers-The US and South America) is grown in many other countries with both Winter wheat AND Spring Wheat. 

Winter Wheat is harvested at the end of Spring each year. The Spring Wheat harvest is just over halfway and this years Spring Wheat crop featured robust yields, though the market has know this all Summer.

Crop progress

https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/pk02f402r/pz50jm81t/prog3424.pdf

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                USDA August 12, 2024            

                            7 responses |            

                Started by metmike - Aug. 12, 2024, 1:41 p.m.            

https://www.marketforum.com/forum/topic/106589/

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Global Supply Outlook Helps Push Wheat Prices Lower

                                                                    

  https://internationalbanker.com/brokerage/expansive-global-supply-outlook-helps-push-wheat-prices-lower/


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I have a great POTENTIAL wheat trade for you, identified WELL BEFORE it happens, when there is an opportunity for people here  to make money instead of finding out 2 months AFTER the entry point.

See the evaluation next:

By metmike - Sept. 2, 2024, 3:02 p.m.
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The Winter Wheat crop planting season is coming up. Starting from around mid September to as late as early November.

 Waiting until after that doesn't give the wheat plants enough time before the cold hits to EMERGE and establish deep enough roots to survive the Winter well after going dormant.  

The tillering of the wheat plants which defines the wheat stands, ideally should reach the Fekes 2.0 stage in the Fall BEFORE going dormant to maximize survival over the Winter months. 


WHEAT GROWTH STAGES

https://stepupsoy.osu.edu/wheat-production/wheat-growth-stages-and-associated-management

Feekes 1.0: Emergence

The number of leaves present on the first shoot (main stem) can be designated with a decimal. For example, 1.3 is a single shoot with three leaves unfolded. The most significant event in achieving high yields is stand establishment, i.e, the number of plants or tillers per square foot. Late-planted wheat has less time to tiller and should be planted at a higher seeding rate to compensate for fewer tillers.

Feekes 2.0: Beginning of Tillering (usually in fall)

A tiller is a shoot that originates at the coleoptilar node. Tillers share the same root mass with the main stem (Figure 1). During tillering, the major management consideration is whether stands are adequate to achieve yield goals. Management inputs will not compensate for skimpy or erratic stands caused by insects, seedling diseases, poor seed quality, herbicide injury, etc. A producer may want to apply 20 to 30 pounds per acre starter N to promote tillering, especially if planting without tillage. Excess N applied at this time leads to a lush, vegetative growth which makes the crop more susceptible to winterkill and foliar fungal diseases. Adequate phosphorus (P) and soil pH above 6.0 are needed for good root and tiller development.

Feekes 3.0: Tillers Formed (late fall or early spring)

Winter wheat can continue to tiller for several weeks. Depending upon the planting date and weather conditions, tillering can either be interrupted by or completed prior to the onset of winter dormancy. Most of the tillers that contribute to grain yield are completed during this stage.

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Armed with this knowledge BEFORE the crop is planted the next 2+ months, gives us the ability to predict how weather will likely impact the planting season,

Spring is usually our wettest season, so excessive rains/cold in the Spring can often impact corn and soybean planting. 

Fall is our DRIEST season and this is usually the risk for planting the HRW crop(in the Plains) and SRW crop(Midwest/South).

There needs to be enough moisture in the soil to germinate the newly planted wheat seeds.

Even if you plant in timely fashion, bone dry soils can result in uneven germination and lack of development.

Bone dry soils in Winter also INCREASE Winter Kill because the cold WILL penetrate deeper and do more damage to plants, especially if they were not well established in the Fall, when there is no snow cover insulating the ground below it.

The potential trade setting up features the flash drought/drought in a large area of the SRW and HRW belt right now, ahead of the Winter Wheat planting season.

Keep in mind that the planting has not even started yet...........which also means the market has not even started trading this yet........which is why its the type of trade that you can actually make money on by seeing it BEFORE it happens.

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https://www.uswheat.org/wheatletter/u-s-wheat-seeding-involves-careful-planning-and-varietal-selection/

By metmike - Sept. 2, 2024, 3:18 p.m.
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The current soil moisture maps identify some problem areas for the Winter wheat crops from dryness.

Again, keep in mind that we have almost 2 months for some nice rains to enter the picture and recharge soil moisture enough to turn the weather from bullish to bearish.

The market is NOT concerned right now, knowing this.

If it continues to stay dry, its not whether the market will react bullishly or not but WHEN WILL IT DO THAT and how strong the upside will be.

I would contend that this already started early last week, see price charts on the next page.

I can't always predict the day to day movements .......but have crystal clearly identified the set up here and we always give you the updated weather forecasts.

This is exactly the type of trade that tjc loves the most. Picking tops and bottoms.......which this is basically trying to do with wheat.

Soilmoisture anomaly:

These maps sometimes take a day to catch up to incorporate the latest data(the bottom map is only updated once a week).



https://www.cpc.ncep.noaa.gov/products/Soilmst_Monitoring/US/Soilmst/Soilmst.shtml#

                            

Daily Soil Moisture Pecentile       

        Daily Anomaly Soil Moisture (mm)

        


                       ++++++++++++++++++++++++++++

Updated daily below:

https://mrcc.purdue.edu/cliwatch/watch.htm#curMonths


DROUGHT MONITOR

https://droughtmonitor.unl.edu/

August 27, 2024: Drought returning in the ECB


https://www.marketforum.com/forum/topic/83844/#83852

Extended weather.


https://www.cpc.ncep.noaa.gov/products/predictions/610day/

6 to 10 day outlooks

Click below for information about how to read 6-10 day outlook maps
 Temperature        Precipitation
Click below for archives of past outlooks (data & graphics), historical analogs to todays forecast, and other formats of the 6-10 day outlooks
ArchivesAnalogsLines-Only FormatGIS Data

Temperature Probability

6 to 10 Day Outlook - Temperature Probability
Precipitation Probability

6 to 10 Day Outlook - Precipitation Probability
 
8 to 14 Day Outlooks

Click below for information about how to read 6-10 day outlook maps
 Temperature        Precipitation
Click below for archives of past outlooks (data & graphics), historical analogs to todays forecast, and other formats of the 8-14 day outlooks
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Temperature Probability

8 to 14 Day Outlook - Temperature Probability
Precipitation Probability

8 to 14 Day Outlook - Precipitation Probability


Compare that to the areas that grow Winter Wheat. HRW in the Plains, SRW east of that.

https://www.nass.usda.gov/Charts_and_Maps/Crops_County/ww-pr.php

By metmike - Sept. 2, 2024, 3:50 p.m.
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Sure looks like we put in a significant low, last Tuesday, August 27th in the 495 area. This is the front month, September. The contract with the most volume, December is trading around 15c higher.

https://tradingeconomics.com/commodity/wheat

1. 50 years

2. 5 years

3. 1 year-There's that spike low, reversal higher last week

4. 1 month 

5. 1 week-We've already bounced almost 40c from that significant low. This is your downside risk right now. The best, lower risk entry point was the day after the reversal up. However, note the spike lower, retest of $5 on the Thursday morning open. The funds sold hard on the open, below the previous days low/resistance and hit alot of stops, testing $5.........then immediately reversed back up with a sharply higher close. So Thursday was the day that most strongly confirmed that the lows are LIKELY in for wheat. Keep in mind that a huge widespread rain could change the weather's impact BUT NOT THE NEXT FEW DAYS!


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Also, on Mikes wheat chart above, we should note the DIVERGENCE in wheat indicators at the bottom with the price above, especially the MACD that has been increasing, despite wheat prices continuing to DECREASE until last week's reversal up.

The RSI shows a double bottom with the late June, harvest  low. 

By metmike - Sept. 2, 2024, 3:51 p.m.
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Total rains the next 2 weeks from the last 12z GEFS.


7 Day Total precipitation below:

http://www.wpc.ncep.noaa.govcdx /qpf/p168i.gif?1530796126

http://www.wpc.ncep.noaa.gov/qpf/p168i.gif?1530796126

By metmike - Sept. 2, 2024, 4:23 p.m.
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COT Report: WHEAT-SRW - CHICAGO BOARD OF TRADE

https://www.tradingster.com/cot/legacy-futures/001602


metmike: Big specs have been covering their net short this year but are still net short by around -33,000 contracts.

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This is the HRW data:

https://www.tradingster.com/cot/legacy-futures/001612



Unlike corn, they control a higher % of the open interest, mainly because C has a much higher open interest from commercials.


By metmike - Sept. 2, 2024, 4:32 p.m.
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Same report for corn and beans:


https://www.tradingster.com/cot/legacy-futures/002602



https://www.tradingster.com/cot/legacy-futures/002602

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We've been pointing out the bullishness of the soybean market set up the past week,especially with the very dry ending shaving off a couple of bushels from the national yield:


  Beans                        

                48 responses |        

                Started by baker - Aug. 8, 2024, 7:36 p.m.            

https://www.marketforum.com/forum/topic/106521/

By metmike - Sept. 3, 2024, 12:20 p.m.
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As we pointed out yesterday, the weather has turned BULLISH for wheat ……..along with comprehensive details on wheat trading dynamics that drive the market and price changes BEFORE IT HAPPENED and wheat is +13c today.

Weather remains BULLISH for wheat for the previous reasoning.
same with beans that are +24c at the moment and also have bullish weather.

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This is another bullish weather item that the wheat market has been trading:

Karen Braun@kannbwx


#Argentina is facing more weather woes as dryness and winter frosts have plagued the #wheat crop. Rain could be coming within a few days, but the amounts may not be sufficient.

Image

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https://ipad.fas.usda.gov/countrysummary/Default.aspx?id=AR&crop=Wheat

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https://www.cpc.ncep.noaa.gov/products/Precip_Monitoring/Figures/global/n.90day.figb.gif


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2 week rains from the last 12z GEFS. Not much for wheat country in Argentina!

December wheat finished +15c, near the highs, here on Tuesday September 3, 2024.

By metmike - Sept. 3, 2024, 4:46 p.m.
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Karen Braun@kannbwx

Less than half of #France's #wheat crop meets the typical protein levels used by key importers and only 1/4 meets average test weight levels (usually 3/4 of the crop meets this standard). France's harvest will be the smallest since the 1980s after excessive rains this season.

Image

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@kannbwx

Aug 28
North Africa is a major destination for French wheat, but China has also been a consistent customer in the last couple years, especially earlier this year: (chart from LSEG Eikon)

By metmike - Sept. 20, 2024, 8:16 p.m.
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                Re: Wheat Seasonal Trade            

                         By metmike - Sept. 3, 2024, 12:20 p.m.            

            As we pointed out yesterday, the weather has turned BULLISH for wheat ……..along with comprehensive details on wheat trading dynamics that drive the market and price changes BEFORE IT HAPPENED and wheat is +13c today.

Weather remains BULLISH for wheat for the previous reasoning.

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1. 1 month-August 27th MAJOR BOTTOM at $4.94!  Peaked 9-13 just below $6. A 30c correction down since then on needed rains with this current system + pattern change to wetter!  Still up ~70c from the lows less than a month ago! 

2. 1 year-May 27 high $7.16-ish. WOW! What a drop in 3 months!

3. 10 years- $11.80 all time high Feb and May 2022!

4. 50 years-$10.75 high in 2008! $3.60 low in 2016!

https://tradingeconomics.com/commodity/wheat

By metmike - Sept. 20, 2024, 8:29 p.m.
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New product that shows how depleted our soil moisture is.

100 cm = 39 inches =just over 3 feet down. Evansville is in the darkest shade of red. 

Basically, close to the lowest soil moisture ever in the top 3 feet. We can see how Francine greatly helped areas just barely south of us a week ago.

https://www.drought.gov/data-maps-tools/nasa-sport-lis-soil-moisture-products


Compare that to the areas that grow Winter Wheat. HRW in the Plains, SRW east of that. Almost the same exact areas which is why we alerted you to most of  the $1+ rally BEFORE it happened based on the weather forecast.

https://www.nass.usda.gov/Charts_and_Maps/Crops_County/ww-pr.php

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Pattern change to wetter weather coming up in some spots that need it the most. This was the last 12z GEFS 2 week rains:


Latest NWS 1 week rains. Much of this will be falling in the next 5 days.....where needed the most!

Image below is a frozen frame from Friday pm. Go to the link for the latest update.

7 Day Total precipitation below:

http://www.wpc.ncep.noaa.govcdx /qpf/p168i.gif?1530796126

By metmike - Oct. 2, 2024, 10:42 a.m.
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After some needed rains fell late last week/over the weekend, mainly in some of the Soft Red Winter Wheat growing areas that pressured wheat prices ahead of that, the forecasts have been bone dry this week and VERY bullish wheat prices. Wheat has broken out to the upside(other factors have become bullish too):

SOIL MOISTURE:

https://www.drought.gov/data-maps-tools/nasa-sport-lis-soil-moisture-products

                                    


   

https://www.wunderground.com/maps/precipitation/weekly

9-30-24 Rains the past 7 days. Remnants of Helene dominate!


2 week rains from the last 6z GEFS run: NO RAIN ANYWHERE IN THE WHEAT BELT!


By metmike - Oct. 2, 2024, 10:52 a.m.
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Previous technical analysis from the past month still valid today:

https://www.marketforum.com/forum/topic/107127/#107134

https://www.marketforum.com/forum/topic/107127/#107553

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https://tradingeconomics.com/commodity/wheat

1. 1 week

2. 1 month

3. 1 year

4. 10 years

5. 50 years

By metmike - Oct. 2, 2024, 12:42 p.m.
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Karen Braun@kannbwx

Image

metmike: The flash drought caused producers to get beans out of the field quickly because drying out too much will cause yields losses for beans(pod shattering). These were the earlier planted beans that will have the highest yields. The later planted beans had more pod filling during the flash drought. Yields WILL drop in the 2nd half of the bean harvest.

Complete report:

https://downloads.usda.library.cornell.edu/usda-esmis/files/8336h188j/6w926416z/r207wg24t/prog3924.pdf

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Recent rains were likely enough to plant and germinate wheat in most places. We will see poor wheat stands(establishment) if it stays dry thru October which looks likely right now. 

Wheat plants that are not well established before going dormant in November/early December will be especially vulnerable to Winter kill............starting when temps drop below +10 deg. F without insulating snow on the ground and shallow roots.

Below -10 Deg. F with no snow is the threshold many use for major damage to the dormant wheat. 


https://www.sunflower.k-state.edu/agronomy/wheat/winter_damage.html


Factors Contributing to Winter Wheat Winter Injury/Kill in 2014-15

https://cropwatch.unl.edu/factors-contributing-winter-wheat-winter-injurykill-2014-15

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This article above is for North Platte, NE, which has a unique climate(drier and colder), so planting and conditions will be different than most of the Winter Wheat belt.


Winter injury to winter wheat in Michigan

https://www.canr.msu.edu/news/winter_injury_to_winter_wheat_in_michigan

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Low Temperature Effects on Winter Wheat

https://extension.sdstate.edu/low-temperature-effects-winter-wheat


Previous weather event type conditions:

WINTERKILL: Sub-Zero Temps to Damage US Wheat Crop

https://www.youtube.com/watch?v=_rkCxA4zs_0

By metmike - Oct. 4, 2024, 1:13 p.m.
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Karen Braun@kannbwx

#Russia's fifth-largest grain producing region, Voronezh, has declared a state of emergency due to drought. Voronezh borders Ukraine and is the outlined area on the map below.

Image


Karen Braun@kannbwx

#Egypt's state grains buyer struck a deal to receive monthly #wheat supplies between November-April, about 510,000 tonnes per month. This totals 3.12 mmt, and is one of the largest ever direct deals. Source will be Black Sea.https://msn.com/en-us/money/ma


Karen Braun@kannbwx

Oct. 2: CBOT Dec #wheat futures settle up 2.7% at $6.15-1/4 per bu, the most-active contract's first $6+ finish since mid-June. In focus:Worsening drought in top-exporter RussiaEgypt strikes one of the largest ever direct wheat buying deals Downgrades to Australian crop

Image

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October 4, metmike: Wheat has surprisingly dropped 30c since these spike highs and getting within 10c of testing the 20 day moving average.

Not sure of the reason right now, possibly better rain chances in the 2nd half of October??? Too much of a price increase too fast? Funds have covered most of their shorts???

By metmike - Oct. 4, 2024, 1:28 p.m.
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 Wheat has surprisingly dropped 30c since these spike highs and getting within 10c of testing the 20 day moving average.

Not sure of the reason right now, possibly better rain chances in the 2nd half of October??? Too much of a price increase too fast? Funds have covered most of their shorts??? Wheat is globally traded more and has many more key producing areas than corn/beans(US and South America count most for exports).......including the US,  Australia, Russia, Ukraine, Canada and France. It's FOOD for people!!!!  Corn and soybean meal are food FOR ANIMALS.

https://tradingeconomics.com/commodity/wheat

1. 1 month

2. 1 year

3. 50 years

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https://worldpopulationreview.com/country-rankings/wheat-exports-by-country

By metmike - Oct. 4, 2024, 1:33 p.m.
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