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Wheat Futures Dropping Amid Weak Export Sales and Dollar Strength

Wheat futures are seeing declines as export sales weaken. Export data shows a significant drop below estimates, causing concerns in the market. Investors should watch these trends closely for potential impacts on related stocks.

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AI Rating:   4

Market Decline: Wheat futures are falling today, primarily due to a weaker round of export business. Chicago SRW futures are 7 to 9 cents down, while Kansas City HRW contracts drop by 9 to 10 cents. The persistent strength in the US dollar index adds further pressure.

Export Sales Data: The USDA Export Sales revealed a net reduction of 248,849 MT, which is markedly lower than the estimated sales range of 300,000 to 700,000 MT for old crops. Notably, Vietnam purchased 69,500 MT, but Indonesia bought 62,000 MT, while Panama canceled 272,900 MT. The overall net reduction of 123,800 MT for unknown destinations indicates potential turbulence in future sales.

New Crop Bookings: Conversely, new crop bookings exceeded expectations, reaching 491,092 MT, well above the predicted range of 25,000 to 100,000 MT. This influx might suggest future potential, yet it does not compensate for the current weak performance.

Production and Stocks Insights: The International Grains Council's report indicates an increase in wheat production for 2024/25, up 2 MMT to 799 MMT, with stocks also rising by 1 MMT to 265 MMT. However, projections for 2025/26 show an increase in production by 8 MMT year-over-year, while consumption is projected to rise, potentially driving down stock levels by 6 MMT to 259 MMT. This contradicts current supply demand dynamics.

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