Don’t Sleep On Spring Wheat: CBOT Analysis

Spring Wheat

The latest CBOT analysis from John Payne, Senior Futures & Options Broker with Daniels Trading in Chicago, discussing corn, soybeans, cotton and spring wheat trades.

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Argentina Port Workers Strike Ends

“Argentina port workers strike has ended.  Argentina’s soy crushing companies signed a contract with the country’s oilseed workers union late Tuesday, ending a strike that has disrupted crushing and port activity since Dec. 9. There is now at least a 162-ship backlog to work through, according to the Rosario grains exchange. Soybean markets broke on this news, but have come back as overnight losses are pared and 13 remains in the eyes of bulls and January first notice day starts on the close.  The entire soy complex enters delivery near 6 year highs.”

“Meanwhile, weather in Argentina remains threatening as nearly no rainfall exists in the 10 day forecast. Brazil looks to receive decent moisture over the coming weeks as the 1st crop bean harvest begins at the end of Jan.”

“US weather provides chances of rain for a lot of Texas but not the parched cotton areas in the panhandle as drought continues.  Texas producers tell me when it is dry like this, rains have a high chance of missing.”

“July cotton is only 1.5 cents away from trading at 80.  While corn and soybeans trade with a record long spec profile, cotton (and wheat) have plenty of room before hitting record levels. A strong Chinese Yuan is expected in 2021, as well as lower acreage due to high soybean and corn/milo competition.”

Spring Wheat Acres To Fall

“Speaking of competition, don’t sleep on spring wheat. I expect more than a few producers who have been planting hi-protein spring wheat to make a switch back to soybeans.  Producers are looking at 6 dollar minny wheat or 11 dollar beans. While winter wheat acres have expanded in the eastern US, they are likely to fall in the northern regions as producers chase returns. I look for Spring wheat acres to fall to 11 million next year.”

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