During the week ending April 8, December hard red spring wheat gained 66 1/4 cents, its largest weekly gain in five weeks and the second-largest weekly gain seen during the life of the contract. Despite the solid move higher, spring wheat trailed winter wheat gains, with December hard red winter wheat gaining 97 1/4 cents per bushel (bu) and December soft red spring wheat gained 88 1/4 cents.
December MGEX spring wheat reached a high of $11.05 3/4/bu on Friday, facing resistance at the contract high reached on March 8. Daily volume was higher for a fourth consecutive session, with the daily close ending up 26 cents at $11.03 3/4/bu. This move was followed by a 13 1/4 cent surge in price on April 11 that saw a fresh contract high of $11.27 3/4/bu high, the highest trade seen on the continuous December chart (not shown) since March 2008, or over 14 years. Current trade is still close to $2/bu below the Feb 2008 high of $13.09 3/4/bu.
Price is holding well-above the 20- , 50- , 100- and 200-day moving average, all of which are seen trending higher on the attached graphic.
The first study shows the Dec22/March23 contract spread, which closed at a 3-cent inverse on Monday, down from the recent March high of 13 1/2 cents, although continues to reflect a bullish carry. During the past five years, this spread has averaged minus 9.55 cents or a 9.55-cent carry on this date.
The blue histogram bars on the lower study shows the trend in the bullish noncommercial net-long futures position. The size of this position increased by 991 contracts in the week ending April 5, the first week-over-week increase in three weeks. The size of this position is down 24% from the all-time high of 29,470 contracts net-long reached in November 2021, indicating there may be considerable room for increased speculative activity moving forward.
A harsh snowstorm is due to hit the northern states and eastern Canadian Prairies this week. This will slow spring wheat planting activity, but moisture is always welcome. This week's USDA Crop Progress report shows progress in five of the six states monitored, with no progress reported for Minnesota, with the five-year average for the state at 2% for this week. Overall planting is estimated at 6% complete as of April 10, led by progress in Washington at 32% planted and Idaho at 23% planted, both slightly ahead of the average pace. An estimated 2% of the spring wheat is planted in North Dakota, equal to its five-year average.
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