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Wheat Struggles To Tread Water Against Bearish Tide Weekly Wheat Review for November 5, 2014 By Bryce Knorr Wheat didn’t rally with the same enthusiasm of corn and soybeans in October, and for good reason. While the gains in the other markets were suspect fundamentally, wheat doesn’t have much of a story to tell right now. That narrative could change in 2015, but until it does, expect prices to struggle. Success in the short-term will be avoiding a drop to new lows. U.S. export demands remains l
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  Wheat Struggles To Tread Water Against Bearish Tide   Weekly Wheat Review for November 5, 2014   By Bryce Knorr Wheat didn’t rally with the same enthusiasm of corn and soybeans in October, and for good reason. While the gains in the other markets were suspect fundamentally, wheat doesn’t have much of a story to tell right now. That narrative could change in 2015, but until it does, expect prices to struggle. Success in the short-term will be avoiding a drop to new lows. U.S. export demands remains lackluster at best. I expect USDA to lower its forecast of sales for the 2014 marketing year by 25 million bushels in its November 10 report, and the actual decline may wind up double or trip that when all is said and done. While there are a few bright spots – high protein spring wheat and durum, for example – they’re few and far between. Most of the world wants its wheat cheap, and there’s plenty of that coming out of Europe and the Black Sea. The glut could ease in the year ahead if weather takes a toll on production, but it will take some serious problems to get rid of this year’s record global crop. Australian yields likely will fall a little when harvest begins soon, and winter wheat in Russia and Ukraine is off to a spotty start. A dry summer hurt establishment, and the region looks dry into mid-November. A persistent dry pattern could raise concerns about winterkill, not to mention moisture for growth in the spring. China’s crop is doing better, but also faces a dry start to November. Here in the U.S. the crop is off to a decent start, though slow soft red winter wheat seeding and a turn drier on the Plains are worth noting. Early crop ratings don’t mean much by the time harvest rolls around, but they are the only indicator the market has. Old crop futures begin to slide seasonally in November in years of adequate supply, and there’s nothing to prevent that for the 2014. So it’s time to bite the bull and be done with it, selling carry if basis is weak, especially in Chicago and Minneapolis. Pricing a quarter of new crop over the next 30 to 60 days is also prudent. Though prices are below base levels for crop insurance those policies will provide at least a little upside protection.    Wheat Supply & Demand Table 2013201420142015 AreaCurrentInitialPlanted 56,156 56,822 56,822 56,822  Harvested 45,157 46,476 46,476 46,476  Yield 47.3 43.8 43.9 47.9  Beginning stocks 718 590 590 737  Production 2,135 2,036 2,034 2,222  Imports 169 170 170 126  Supply, total 3,022 2,795 2,793 3,085  Food 953 960 958 968  Seed 74 76 75 78  Feed and residual 228 180 125 167  Domestic, total 1,255 1,216 1,158 1,113  Exports 1,176 925 901 1,032  Use, total 2,431 2,142 2,059 2,315  Ending stocks 590 654 737 768   Average price $6.87$5.90$5.58$5.22 Stocks to use ratio 24.3%30.5%35.8%33.2%  Ave. Nearby Futures20142015 Chicago$5.57$5.37Kansas City Hard Red$6.54$5.75Minneapolis$6.04$5.50 This Week's Selling Range20142015 Chicago*$5.57 to $6.20$5.37 to $5.92Kansas City Hard Red*$6.54 to $7.19$5.75 to $6.31Minneapolis*$6.04 to $6.75$5.50 to $6.15*Achived USDABryce    Beginning StocksProductionTotal SupplyDomestic useExportsTotal UseEnding stocksSoft Red Winter  06-07106 390 516 261 146 407 109  07-08109 352 481 217 209 426 55  08-0955 614 702 332 199 531 171  09-10171 404 607 256 109 366 241  10-11242 237 508 228 109 337 171  11-12171 458 662 313 163 477 185  12-13185 420 623 306 193 499 124  13-14124 565 709 311 285 595 114  14-15113 455 583 266 155 421 162  14-15 BK113 432 578 269 176 445 133  White 06-0778 251 342 101 197 298 44  07-0844 221 280 73 170 243 37  08-0937 255 300 100 136 236 64  09-1064 237 310 88 143 231 79  10-1180 275 362 95 182 277 85  11-1285 314 407 127 216 343 64  12-1364 259 330 92 175 267 63  13-1463 268 339 117 171 289 50  14-1550 224 283 101 145 246 37  14-15 BK50 248 307 94 141 234 73  Durum 06-0740 53 135 79 35 114 22  07-0822 72 131 83 40 123 8  08-098 84 130 81 24 105 25  09-1025 109 171 84 40 124 47  10-1135 106 173 95 43 138 35  11-1235 50 122 70 27 97 25  12-1325 82 143 91 29 120 23  13-1423 62 129 77 30 107 22  14-1522 57 129 88 25 113 16  14-15 BK22 57 129 86 40 126 3  Hard Red Spring 06-07132 432 615 247 250 497 118  07-08118 450 614 240 305 546 68  08-0968 512 625 273 210 483 142  09-10142 548 731 282 214 497 234  10-11234 570 832 309 339 647 185  11-12185 398 619 223 245 468 151  12-13151 505 699 302 232 534 165  13-14165 490 733 317 247 564 169  14-15169 564 815 308 260 568 247  14-15 BK169 476 727 263 255 518 209  Hard Red Winter  06-07215 682 898 452 281 733 165  07-08165 956 1,121 451 538 989 132  08-09132 1,035 1,167 472 448 919 248  09-10248 920 1,175 420 370 790 385  10-11385 1,018 1,404 403 616 1,018 386  11-12386 780 1,167 452 398 850 317  12-13317 1,000 1,339 615 381 996 343  13-14343 744 1,106 422 449 871 235  14-15236 738 985 453 340 793 192  14-15 BK236 1,009 1,256 502 425 927 329 
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