Spring Wheat Rally Needs a Spark
Brian Grossman of Zaner Group, Ag Hedging - InsideFutures.com - Wed May 16, 1:37PM CDT

Coming out of a less than ideal but much better than expected 2017, Minneapolis spring wheat continues to struggle after prices fell by 30% from early July 2017 highs. Now, producers are struggling to get the crop in the ground and with planting progress at 58%; below the 67% 5-year average. While the slow grind is miserable for the producer, it may be setting itself for something similar to last year.

The fact of being behind the average may mean very little for total planted acreage as 2014 planting progress at this time (May 11, 2014) was only 34% vs the 5-year average of 53% and producers still planted 13.025 million acres; 1.106 million more than the USDA estimated in Prospective Planting. Also similar to 2014 are the states furthest behind in planting: North Dakota and Minnesota. It is very likely they will be able to catch up before time runs out.

Ag Hedge Calendar Handy reference and calendar guide - in US only
http://www.zaner.com/offers/calendar.asp?ap=bgrossma

The bigger picture is the moisture conditions in these key states. North Dakotas northern and eastern regions are suffering the same fate that western/central North Dakota experienced last year not enough rain. What is most different this time is northeastern North Dakota may plant less acreage but yield is significantly higher than to the west.

Not only is planting behind pace but soil and subsoil conditions are in much worse shape. Crop Progress shows North Dakota top soil at 53% Adequate/Surplus with 47% Very Short/Short compared to 88% Adequate/Surplus and 12% Very Short/Short this time last year. Subsoil conditions tell a similar story with 49% Adequate/Surplus compared to 91% last year and temperatures are pushing into the mid-80s.

Ag Hedge Newsletter Get daily fundamental and technical updates for free. Sent by email each morning! Sign Up! http://www.zaner.com/offers/ag_hedge_newsletter.asp?ap=bgrossma

This could quickly become a story if drought conditions persist and the fact that later planting will likely equate to this years crop pollinating in the heat of summer. Where this is smoke, there is fire but first we need to find a spark often found with hot and dry conditions. The oddity of this is that managed money hasnt really taken notice. While they have flipped from a net short of 2,769 contracts in early April to a net long position of 1,903 as of May 8th; they are still well below the 4,670 they were long this time last year and the 15,347 long position they held on June 27, 2017.

As open interest in Minneapolis has fallen back to recent lows, managed moneys overall position has changed marginally which has pushed their position to 3.4% of total open interest compared to 7.4% this time last year and 17.8% high last year. This is potentially leaving the door wide open for managed money to shift their attention to a simmering market that price-wise cant get off the ground. After all, it was about this time last year that Minneapolis began its rally to over 8 dollars and conditions are not any better.

Its hard to tell if we will ultimately reach the USDAs estimate of 12.627 million acres as producers are forced to decide between getting corn, soybeans or wheat planted on time. Given the low prices, I feel the bias will be to the row crops in the high yielding wheat regions.

Interested in learning more about my market outlook? Feel free to reach me directly at 312-277-0119 or shoot me an email at bgrossman@zaner.com. Dont forget to sign up for one of our several offers via the links provided above and below!

Thanks!

Brian

Brian Grossman

Market Strategist

Zaner Group, LLC Ag Hedging

(312) 277-0119

bgrossman@zaner.com

@AgHedgeGrossman
www.zaner.com

Forover 30years, Zaner has been helping futures, commodity and forex traders trade smarter, faster and easier. Zaner is an established, highly regarded award-winning execution and brokerage firm known for providing clients with exceptional service. Zaner covers a broad range of commodities with individual divisions which include agricultural, energies and metals. To learn more, sign up:

Ag Hedge Newsletter Get daily fundamental and technical updates for free. Sent by email each morning! Sign Up! http://www.zaner.com/offers/ag_hedge_newsletter.asp?ap=bgrossma

Zaner Text Notice (US Only) Sign up for free market price updates at 1130am and settlement prices as well as USDA reports. Also giving easy texting access to a Zaner Group Ag broker! Sign Up! http://www.zaner.com/landing/ag_hedge_text.asp?ap=bgrossma

Ag Hedge Calendar Handy reference and calendar guide - in US only
http://www.zaner.com/offers/calendar.asp?ap=bgrossma

Zaner Daily Commentary:
http://www.zaner.com/offers/?page=16&rID=twitter&ap=bgrossma

MarketHead Quotes/Charts/Technical Analysis:
http://www.markethead.com/2.0/?ap=bgrossma

Precious Metals:
https://zanerpreciousmetals.com/?affiliateid=bgrossma

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS ANDMAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.