Will Wheat Prices Continue Their Tuesday Rally? Market Data Suggests Positive Momentum

Wheat markets are displaying notable strength on Tuesday, with wheat prices climbing across multiple contract months. Chicago SRW futures have edged up fractionally to 2 cents, while KC HRW is posting more impressive gains of 4 to 5½ cents. Minneapolis spring wheat is also participating in the midday recovery, though with more modest fractional advances. The rally appears to be broadening across the wheat complex.

Weather Support and Export Momentum Driving the Move

The NOAA 7-day forecast is providing some bullish undertones for the wheat market. The model is calling for 1-2 inches of precipitation across much of the soft red winter country, though very little is expected for portions of the Southern Plains. This uneven distribution could be a factor supporting wheat prices as localized dryness concerns persist in key production areas.

On the export front, USDA data is painting an encouraging picture for wheat demand. Current export commitments have reached 20.108 MMT, representing an 18% jump compared to the same week in the prior year. At 82% of the USDA’s target estimate, this is right in line with the historical average pace, suggesting wheat prices could be finding support from solid international buying interest.

Positioning Shifts Add Complexity to Price Outlook

Recent CFTC Commitment of Traders data reveals that managed money has been increasing net short positions in CBOT wheat futures and options, with contracts reaching 94,626 as of December 30. This suggests that speculators are positioning defensively, which could influence wheat prices going forward. In KC wheat, spec funds were carrying net short positions of 18,319 contracts, down 6,430 contracts from the previous week—a sign of modest repositioning in that market.

International competition also bears watching. European Commission data shows that since July 1 through January 4, EU wheat exports have totaled 11.18 MMT, down 0.17 MMT from the equivalent period last year. This relative softness in EU competition could be supportive for wheat prices in global markets.

Current Contract Valuations Point to Strength

Looking at today’s levels, wheat prices across the board are reflecting the positive sentiment:

• Mar 26 CBOT Wheat: $5.13¾, up 1¼ cents
• May 26 CBOT Wheat: $5.24¼, up ¾ cent
• Mar 26 KCBT Wheat: $5.26¼, up 5½ cents
• May 26 KCBT Wheat: $5.37¾, up 4½ cents
• Mar 26 MIAX Wheat: $5.71¾, up ½ cent
• May 26 MIAX Wheat: $5.82¼, up ½ cent

The question for traders now becomes whether this wheat prices rally can extend beyond today’s session. The combination of supporting weather patterns, solid export demand, and shifting fund positioning suggests that buyers may have reasons to maintain their interest, though positioning data indicates caution among speculators about pushing wheat prices too much higher from current levels.