Wheat Comments

The USDA did not make any changes to the U.S supply/Usage balance estimate this month.

The old crop carryout to stocks ratio is estimated at 43% compared to 53% last year. The accompanying scatter study plots the March/June high for Chicago  cash wheat as a function of the old crop carryout/crop year usage ratio.

Traders will gradually switch their  focus to new crop wheat this spring . The USDA estimates winter wheat planted area  was reduced one percent last fall. The winter crop was rated 52% in good to excellent condition prior to dormancy last autumn which compares to 55% the previous year.

Wet weather reduced spring wheat production in 2019. Normal weather would likely result in a significant increase in the 2020 spring wheat crop. 

The old crop scatter provides a base to judge new crop developments. For the time being wheat is trading in line with data available in early March.