Daily Ag Direction 06/02/25
Good Morning!
We have finally seen a few news stories that are facilitating short covering in wheat. This market is very susceptible to short covering and US and EU wheat are higher on the escalation in the Ukraine War. If escalation jeopardizes trade and supply, combined with the extreme short position in wheat, it could spark the powder keg we have all been watching. Looking at technicals, KC wheat is trading above the 20-day and just below the 50-day ma. We really need to see trade above $5.51 to break the 50-day resistance level. After that, the 100-day sits at $5.75/bu. and will provide ample resistance. We have had these rallies before and failed to continue so trade through the early part of this week will be crucial. The weaker US dollar is also helping maintain export business. I still believe that Funds’ goal for short covering will be delayed until harvest sales start coming in. Unless a bunch of algos get tripped, any “rally” could be muted and drawn out. Nobody knows for sure. In weather news, heavy rains across Oklahoma and Texas will hamper early harvest progress and could quickly lead to quality concerns. There is a storm of bullish conditions hitting here at the same time which will hopefully lead to farmer selling opportunities. Corn is a follower today benefiting from much of the same information as wheat is. The general feeling is the corn crop is a little behind schedule with cooler temps but that saw improvement over the weekend. The bean market is awaiting the NOPA dataset on crush, oil stocks and disappearance. Crush is expected to be lower than last month and beans are trading lower this AM.
July KC Wheat +14.4 @ $5.48
July 26 KC Wheat +12.0 @ $6.17
July Corn +2.6 @ $4.47
Dec 25 Corn +2.0 @ $4.41
July Beans -7.0 @ $10.35
Nov 25 Beans -8.0 @ $10.19
Aug Feeders +2.225 @ $301.050
June Live +0.825 @ $216.300
Please reach out to your CEA Risk Management Advisor if you have any questions. Have a great day!
-Trent
