Day 1 of the Kansas wheat tour yesterday with the tour pegging northern Kansas yield at 43.0 bushels versus 47.1 last year and the five year average of 42.7. They noted the full extent of the damage from recent freeze event will not be known for several days. Today scouts will travel from Colby to Wichita sampling fields in the western to southwestern parts of Kansas. The open interest in Chicago wheat went down 12,434 contracts yesterday and Kansas City went down 11,126 contracts. Russian wheat storage capacity has risen as much as 30% over the last seven years. Russian farmers have delayed selling some of their crops as the ruble has rallied in the past year making wheat exports priced in dollars less attractive. Russia will start the new season with the most wheat ever in storage. The trade remains on edge with the Kansas wheat tours second day on tour as the tour moves west they should start to uncover some damage from the weekend storm. Argentina’s Buenos Aires province wheat plantings may rise 10% compared to last year due to larger planted area. Last year, several thousand hectares could not be sown because of the extreme wet weather with this year’s wheat crop estimated at 17.5 million tonnes compared to the latest USDA estimate at 16.0 million. Stats Canada inventory report on Friday has analysts estimating their total wheat inventories at 18.12 million tonnes, which is up 31% from last year’s 13.79 million tonnes.
TODAY’S MARKET IDEAS: Both Kansas City wheat and Chicago wheat traded to nearly two month highs yesterday. Both markets set back from the highs, but both closed above the 50-day, 100-day, and 200-day moving averages for the second consecutive day. Chicago wheat is testing the 50 day moving average at 445 3/4 this morning and KC is testing the 200 day at 455 1/2. The wheat tour should have more to say about a potentially damaged crop later in the week as the tour moves further west and some forecasts are now looking at very cold temperatures over the weekend in the soft red areas. Pullback support in Chicago is at 446 3/4 followed by 444.