Afternoon wheat: Markets continue to move lower

<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><p id=\"isPasted\" style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Futures:</span></u></em></strong></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Chicago wheat futures tested their May lows today, those lows held, and trade was able to level off and bounce slightly, ultimately finishing a nickel off those lows. The market is entering an important time frame, with $5.56 &frac34; basis Sept and $5.79 basis Dec (both of which are June&rsquo;s lows) being relevant support.&nbsp;</span><span style=\'font-family:\"Arial\",sans-serif;\'>KC wheat futures not only saw slightly weaker trade than Chicago, but here the market moved and settled below their recent sideways trading pattern. Not only that, but the lower board followed an inside day on the chart, which many times suggests more aggressive price action.&nbsp;</span><span style=\'font-family:\"Arial\",sans-serif;\'>The KC/Chicago spread continues to grind lower. Here, there is a small gap left in the Dec from back in April between 4 and 4 &frac34; under. Closing that gap would suggest another retest of their lows at 13 &frac12; under.&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The July WASDE will be out Friday morning. It is a big report for wheat, with plenty of data. Winter wheat production was updated last month, but don&rsquo;t be surprised if the USDA provides a much higher overall production number as they did show last month that harvested acres were larger than expected. The USDA will incorporate the data from the June 30 acreage report into this report. We also get our first look at Spring and Durum wheat production projections.&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><br></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Also, the USDA will give us our first class by class breakdown of ending stocks for new crop. We already know from the quarterly stocks data from a couple weeks ago that old crop ending stocks, which turn into beginning stocks for the new marketing year, will be 702 mil bu, which is 14 mil bu larger than the USDA&rsquo;s prior estimate.&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><br></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Headline news:</span></u></em></strong><span style=\"color:black;\">&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>USDA weekly export sales will be out in the morning. Last week was a shortened week of trade with the Fourth of July Holiday, but there were still a couple sales announcements, in total 100 TMT of old crop corn and 110 TMT of soybeans (of which 55 TMT was new crop). Wheat sales will probably come back to more normalcy tomorrow, this coming after last week&rsquo;s impressive 805 TMT. Look for between 400 and 600 TMT.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>There are reports that India&#39;s gov&rsquo;t is planning on selling state-held wheat reserves to bulk users such as flour millers and biscuit manufacturers starting in August. The grain price is expected to be around $279/mt, which would be 12% lower than open domestic market prices. However, the quantity offered for sale has not been finalized yet.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>EU farming lobby COPA-COGECA projects 2024 EU common wheat production of 117.5 MMT, which would be down 6.4% year over year. Durum wheat production is projected at 6.6 MMT, which would be down 5.7% year over year. &nbsp;&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Egypt&#39;s cabinet has lowered its objective for self-sufficiency in wheat to 51% this fiscal year, which is off from their previous target of 65%. The country is currently 49% self-sufficient. &nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Export business around this week:</span></u></em></strong><span style=\"color:black;\">&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Algeria&rsquo;s OAIC has begun purchasing wheat in their tender. Volumes and price are yet to be mentioned, but the tender is for their two smaller ports, so expectations are for not a very large purchase.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>South Korean flour millers bought a total of 90 TMT of US and Canadian milling wheat. The total included 40,000 mt of Canadian western red spring (priced in the upper $250&rsquo;s/mt) and DNS (priced in the lower $280s/mt). The total also included 50,000 mt of US. Broken down, the mixture included 9.5% to 11% protein white wheat priced in the low $230&rsquo;s/mt, and 9% protein soft white wheat priced in the mid $230&rsquo;s/mt.&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Jordan passed on all 7 offers in their tender for 120 TMT of opt origin milling wheat.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>July 11 Japan is in with a regular tender seeking 107,330 mt of Aussie, Canadian and US milling wheat. The total includes 29,350 mt of Aussie white, 27,540 mt of Canadian red, 27,680 mt of US HRW, and 22,760 mt of US DNS wheat. &nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>July 16 Jordan is back in for 120 TMT of opt origin milling wheat. &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>&nbsp;</span></p></div>