March options expired yesterday. The option expiration day is seldom a good day for the owners of grain and oil seeds, whether in the bin or on the CBOT. Late February, over the decades, is usually the winter low for corn and beans.
There was economic news released Friday morning that the market thinks justified higher interest rates by the Federal reserve, so the dollar was stronger, which is bad for exports, and wheat relies more on export demand than any commodity with the possible exception of U.S. cotton.
The wheat market was hammered yesterday by the stronger dollar, a chance of rain this weekend in the hard red wheat areas of the U.S., the idea the grain export corridor for Ukrainian grain most likely will get extended, and even disappointment that the war had not vastly escalated yesterday, the first anniversary of Russia’s invasion into Ukraine. As of this morning, the probability of rain this weekend on the U.S. hard red wheat has been substantially reduced.
While “everyone” has been bad-mouthing U.S. wheat exports since last summer, take a look at the chart below comparing by class this marketing year-to-date (began 1 June) wheat export totals with the previous marketing year. You will see only hard red winter wheat exports are less than a year ago, which is because this year’s U.S. carryout is 130 million bushels less than a year ago and 277 million bushels less than two years ago because of drought in the HRWW area for years.