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January 11 Grains Commentary: Terry Roggensack

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This is Terry Roggensack coming to you from the CME Group trading floor. Today we're gonna talk a little bit about the wheat market. We've got big reports from the USDA coming out tomorrow. Key report will be the planted acreage report. Keep in mind wheat planted acres for the coming season expected to be the lowest since 1909. Winter wheat planting's expected at 31.5 million acres. We've got a 30.1 to 32.5 range of estimates for the report tomorrow. 32.7 was a year ago. Since the year 2000, we've only had two times where the winter wheat acreage number came in above the trade estimates. Second key factor for the wheat market, drought expanding in the US central plains D1 to D4. That would be an exceptional drought, D4, for the state of Kansas. Expanded to 52% this week. That's from 32% a week ago, and from just 1.4% three months ago. Keep in mind, winter wheat planted areas across all of the US, D1 is now 43%. We were 33% last week, and 24% on December 12. So clearly drought expectations are increasing for the wheat market. We had very cold weather, record cold weather, in the last two weeks in the central and southern plains. And that could've been a factor to cause some damage. Third factor for the wheat market, which might turn the market up a little bit, extreme oversold level. Manage money traders, big funds, manage money funds, net short 128,000 contracts in the last COT report. Kansas City traders net short 28,000 for that managed money category. These are very oversold levels. July Kansas City wheat, that'd be for new crop, should see very strong support near the 459 and a half level. We would look for the market to work its way up to the 510 level and wouldn't rule out 531 and three quarters as an eventual target for that July Kansas City wheat. Thank you. This is Terry Roggensack coming to you from the CME Group trading floor.

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Duration: 2 minutes and 42 seconds
Country: Andorra
Language: English
License: Dotsub - Standard License
Genre: None
Views: 7
Posted by: cmegroup on Jan 11, 2018

January 11 Grains Commentary: Terry Roggensack

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