Market Bullets® Thursday, April 10, 2025: Pre-Dawn

     Russia’s Institute for Ag Market Studies (IKAR) this week suggested the country's winter crops are in “relatively” good condition and pointed to expectations for a wheat harvest projection for 82.5 million tonnes. Which is a couple of million tonnes stronger than the talk a month ago. In the past the Russians have been better at projecting smaller crops and price-positive factors than expansionary, price-negative crop estimates, so this announcement may be taken more seriously. It is a small adjustment, less than 2%.  

     France’s Strategie Grains analysts raised their All-EU soft Wheat production forecast to 128.1 million metric tonnes, up +600,000 tonnes (about +0.47%) from the previous estimate. Marginal.

      The (over) anticipated impact of Section 301 vessel fees is easing, as U.S. Trade Rep Greer is indicating the fees may not be fully implemented or that they could be “cumulative”. The administrative target is apparently an attempt to re-vitalize a tattered U.S. shipbuilding industry, but mostly seems to be calling attention to a dependency on China for too many things.

     Southern KS, western OK and NE are the driest of the southern plains wheat states, although some marginal moisture has reached the edges of that region in the last month. Texas wheat was reported on Monday at 26% good-to-excellent condition, while OK was listed at 42% and Nebraska at 37%.  Texas harvest usually shows up in Brownsville in the middle-to-third-week of May, about a month away.  

     Marginal changes in ag statistics, like the ones USDA provided in the April WASDE Thursday, are not likely to run the market very far. Wheat stats were mildly negative, with U.S. carryout projected by USDA at 846 Million bushels, above the average of pre-report analysts guesses. World ending stocks were also very slightly increased to 260.70 million metric tonnes, just a tid above the average guess. The market responded with a proportional decline of -4 for Chicago May contracts and -3 for Hard Red Spring (HRS).  KC Hard Red Winter (HRW) and Paris Milling Wheat were weaker, both down 10-11 cents per bushel, likely in part due to the IKAR hints of somewhat improved crop strength in Russia’s vast wheat hectares.

     It will take something more than we what are seeing on the screen today to generate a significant wheat price rally (more than 50 cents+-), with or without tariffs and vessel fees. At the moment there is enough wheat for everyone with no major threat to supply looming, and the trading funds are in a complacent mood. All of this could change quickly, as quiet markets are relatively rare periods of late, so the only solution is to set price alerts on the range boundaries and have a thoughtful conversation with your co-op merchant about tactical plans that can yield cash flow and take advantage of 50-90-cent futures range movements.   

     Every upward move in every market starts with one (1) session up. That makes this business interesting every day! Pay attention to the patterns that show up, usually after a long period of no-trend, otherwise known as a base. We will see it when it comes, but only if we are looking.

Stay tuned!   

Market Bullets® Thursday, April 10, 2025: Pre-Dawn

     At 4:00 AM Thursday, wheat futures were up 2-6 cents across the board, including Paris. The World Ag Supply/Demand Estimates from USDA will hold the market’s attention until after 9:00 AM.  

     Algeria has accepted tendered offers for durum wheat from Canada, Australia and the United States, with shipments March 1-15, March 16-31 and April 1-15. Algeria is expected to import over 9 million tonnes of wheat to meet domestic demand in the marketing year 2025-26. 

     On Tuesday, with regard to “301 Port Fees”, the U.S. Trade Representative Jamieson Greer told the Senate Finance Committee that the administration is “revising the proposal based on public input” to consider vessel capacity and reduce fees for ships transporting agricultural goods. It the container ships that are the money targets. In any case the pressure has dropped considerably with the “pause” of the tariffs except for China. There is no way to calculate realistic capital forecasts until the matter is much more settled, not likely for at least a couple of months. Meanwhile,   

     As of Thursday morning at 3:30 AM, The Chicago wheat futures market has gained an average of about 3¾-cents per session, but the daily highs have been within ¾-cent of each other. This is known as a “grinding” market, the opposite of an “impulsive” one. In order to declare an uptrend, we have to force a 1-2-3 pattern to fit, but it’s a bit like the sisty ugler trying on Cinderella’s glass slipper. The May contract is 3 cents below its 135-day statistical mean, and 14 cents below the now-horizontal BoR moving average line. All of that is merely an indication of a flat market awaiting motivation.

     USDA will provide some diversion on Thursday at 9:00 AM Pacific Time (UTC-7), 11 Central. The analyst’s consensus based on a Reuters pre-report survey is for an 825 million bushel ending stocks figure for the year, about 6 million greater than last month’s USDA figure. World Stocks of wheat are average-guessed to be at 260.39 million metric tonnes, that’s about -0.12% (twelve one-hundredths of 1%), which is less than the error rate of the actual number. Not impressive. But that is the most exciting thing we have to look at except the tariff and port-fee circus.    

     The charts are not showing a tradeable trend, but they will at some point.

     The stock market has about exhausted itself for the week, with wind-sprints the length of the field in both directions, interrupted only by jumping jacks in between. Friday’s closing settlement may not reveal much about direction. The thing to focus on is the quality of the companies themselves, and not the whippy price action. It is being demonstrated as this is written that the administration is aware of and sensitive to the perceptions of the business community. Impulsive trading on fear or anxiety is not a good idea…skepticism good – cynicism bad! Better to be emotionally centered and deliberate.

     We will see the changes as they emerge. When those changes are confirmed, then we will follow planned actions.

Stay tuned.   

PS – Noticeables:  <Diesel>    <Gold>     <US Dollar Index>    <Ruble VS Yuan>    <2-Yr T-Note> <S&P>

Good hunting!

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North of Prescott, Washington

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The Harvest Crew

“Agriculture is our wisest pursuit because it will in the end contribute most to real wealth, good morals and happiness.” - Thomas Jefferson in a letter to George Washington, April 30, 1787.

“Its the 70th year in a row of unusual weather!’ - Winston Mader (1930 - 2016)

“Prayers Work Best When Your Trades Are With The Trend“ - Larry Williams

“When things go wrong, you'll find they usually go on getting worse for some time; but when things once start going right they often go on getting better and better.” - C.S. Lewis, The Horse and His Boy.

“It Don’t Mean a Thing if it Ain’t Got That Swing” - Duke Ellington - 1932

“If I am worth anything later, I am worth something now. For wheat is wheat, even if people think it is a grass in the beginning.” – Vincent van Gogh.

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