WHEAT: March 1st Wheat Stocks are the Lowest Since 2008
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May wheat closed sharply lower on the session yesterday and near 70 cents off of the midday peak. However, the Russia/Ukraine conflict is still in place and there are also new crop yield uncertainties for China and the US. The market followed the corn market higher after the report, but sellers turned very active in soybeans and wheat closed sharply lower on the day and experienced the lowest close since March 1. Strength in the US dollar was seen as a bearish force, and export sales were very weak. US all wheat planting intentions came in at 47.35 million acres versus an average expectation of 47.9 million and a range of expectations from 45.9 to 49.1 million. This was up from 46.7 million planted last year. Winter wheat plantings came in at 34.24 million acres versus an average expectation of 34.4 million (range 33.6-35.6 million) and 33.6 million last year. Spring wheat intentions came in at 11.2 million acres versus 11.8 million expected (range 10.5-12.8 million) and 11.4 million last year. March 1st wheat stocks came in at 1.024 billion bushels versus an average expectation of 1.039 billion (range 998 million to 1.302 billion) and 1.311 billion on March 1, 2021. Wheat stocks are the lowest since 2008.
The weekly export sales report showed that for the week ending March 24, net wheat sales came in at 94,987 tonnes for the current marketing year and 81,300 for the next marketing year for a total of just 176,287 tonnes which was well below trade expectations. Cumulative sales have reached 87.2% of the USDA forecast for the 2021/2022 marketing year versus a 5 year average of 93.3%. Soaring costs for food staples in import-dependent Middle Eastern and North African countries are putting people’s resilience at a “breaking point,” according to the United Nations’ World Food Programme. Russia’s invasion of Ukraine has added to surging costs for flour and vegetable oil, which are central to the region’s diets, it said in a statement Thursday. “We are extremely concerned about the millions of people in this region who are already struggling to access enough food because of a toxic combination of conflict, climate change and the economic aftermath of Covid-19,”.
MARKET IDEAS
Except for Oklahoma, there is not much rain in the 2-week outlook. Key support for May wheat is at 977 1/2 with close-in support at 1007 ¼. Resistance is at 1070 1/2 and 1093 3/4. Key support for July Kansas City wheat is at 1005 ¼ with close-in support at 1029 3/4. Resistance is up at 1065 and 1094 3/4.