Wheat Market Outlook

Vol. 19 No. 8 - January 29, 2010 - PDF Version

Market Situation

In Monday’s Texas Crop Weather report, the condition index for Texas wheat fell to its lowest reading of the season. The percentage of wheat rated as very poor and poor increased from 28 percent in the previous week to 34 percent. The crop condition index fell from 296 to 287.

2010 Texas Wheat Crop Condition Rating

That was before Thursday’s storm. Snowfall models from the National Weather Service show snow depth above 20 inches along I-40 and in broad areas of the eastern Texas panhandle and western Oklahoma. The observed precipitation map of the last 7 days reveals most of Texas receiving ½ inch or more. Much heavier rains were seen in central and north central Texas.

Current 7-Day Observed Precipitation

Wheat exports were strong again in this week’s report from USDA. Weekly export sales commitments were 24.28 million bushels, the third highest of the marketing year.

U.S. Wheat Export Sales Commitments

Outside markets continue to create a downdraft for wheat. Corn and soybean prices are still in the doldrums and today’s economic data are being taken with a grain of salt (see today’s Feed Grain Outlook for more detail).

Futures	Friday January 22	Friday January 29	Net Change	Percentage Change
Mar ‘10 KC Wheat	5.0200	4.8700	-0.1500	-2.99%
July ‘10 KC Wheat	5.2575	5.1025	-0.1550	-2.95%
July ‘11 KC Wheat	5.8925	5.7350	-0.1575	-2.67%

Wheat Marketing Strategies

The next level of chart support for July KC wheat is the price consolidation we last saw at the contract lows around $5.00. Seasonal price patterns suggest an upturn in wheat prices as we move from January to February with the best hedging opportunities in March and May.

July 2010 KC Wheat and Marketing Plan

Mark Welch
Texas AgriLife Extension Economist
401 C Blocker Building
TAMU 2124
College Station, Texas 77843
Tel. (979)845-8011
Fax. (979)845-4906
JMWelch(at)ag.tamu.edu

^{The opinions and recommendations expressed are solely those of the author and are intended for educational purposes only as part of the Texas AgriLife Extension Service. Texas AgriLife Extension Service assumes no liability for the use of this newsletter. Educational programs of the Texas AgriLife Extension Service are open to all people without regard to race, color, sex, disability, religion, age, or national origin. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating}