Minneapolis leads U.S. wheat futures trifecta

CNS Canada — Minneapolis wheat prices are gaining on those at other U.S. futures markets, as traders expect reduced acres this year.

But the opposite is true for the Kansas City exchange as the expectation of high production weighs, and Chicago markets are moving on technical trading.

Minneapolis Grain Exchange — “We’re keeping an eye on the planted acreage moving forward,” said Adam Knosalla, broker at Frontier Futures.

The anticipation of lower acres has allowed the market to gain on CBOT (Chicago Board of Trade) and K.C. markets, sitting near US$5.38 per bushel in the July contract on Tuesday.

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“We expect that to be a common theme this year, it’s too early to look at the quality of the wheat,” Knosalla said.

Kansas City Board of Trade — “I think everybody is expecting big yields,” he said.

That anticipation has been priced into the market, with the Chicago-based K.C. exchange’s July hard red wheat trading Tuesday near US$4.58.

The Wheat Quality Council’s Kansas Hard Winter Tour started on Monday and runs until Thursday. The tour will provide production estimates upon completion.

“They’re going to be out on the tour this week, I think everybody is expecting very large yields,” Knosalla said.

Chicago Board of Trade — “Trading the non-fundamentals seems to be a theme here this spring,” Knosalla said.

CBOT wheat is moving mostly on technical signals, with traders watching front-end deliveries, which weighed on July and December contracts.

“That kind of took its toll on the rest of the curve,” Knosalla said.

The market is also watching non-commercial shorts, he added. “We want to see if they want to get out of their position, or if they’re going to ride it for a while.”

In bullish news, Knosalla said he thinks soybean and corn markets will continue trending higher, and CBOT wheat will follow.

Prices were near US$4.72 in the July contract on Tuesday.

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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