Wheat Losses Continuing at Thursday’s Midday

The wheat complex is broadly lower across major exchanges today, with CBOT soft red wheat futures down 3-4.5 cents and most KC HRW and MPLS contracts also declining. This broad market weakness persists despite robust July Census export data revealing 2.305 MMT of wheat shipped, a 34.05% month-over-month and 22.52% year-over-year increase, marking a five-year high for the month. The USDA Export Sales report, delayed due to the holiday, is now anticipated on Friday.

Analysis

The wheat complex is demonstrating broad-based price weakness, with futures declining across the CBT, KC, and MPLS exchanges. Specifically, CBT soft red wheat futures fell by up to 4 ½ cents, and the December KC HRW contract dropped 5 ¼ cents. This bearish price action presents a notable disconnect from recently released, historically strong export data. Monthly Census figures for July revealed wheat exports of 2.305 MMT, a significant increase of 34.05% month-over-month and 22.52% year-over-year, marking a five-year high for the month. This suggests that while past demand was robust, current market sentiment is being driven by other factors, or traders are awaiting more current information. The market's focus will now shift to the delayed USDA Export Sales report, due on Friday, which will serve as a key catalyst and provide a more timely indicator of international demand.

Key Decisions for Investors

• Investors should exercise caution as the market digests the conflict between current bearish price action and strong, albeit dated, July export data.
• The upcoming USDA Export Sales report on Friday is a critical near-term catalyst; its results could either confirm the recent price weakness or trigger a sentiment reversal.
• Consider monitoring calendar spreads, particularly in KC HRW wheat where the September contract's divergence from the December contract signals shifting expectations between near-term and future delivery months.