Wheat Markets Face Pressure from Strengthening Dollar

The wheat complex weakened considerably as the trading week drew to a close, with the dollar index gaining $0.893 creating significant headwinds for commodity prices. This currency movement proved decisive in pushing wheat futures lower across all major trading venues, reversing some of the week’s earlier gains for the staple crop.

Price Declines Across Major Wheat Futures Contracts

Chicago SRW wheat futures experienced losses of 3 to 4 ¼ cents per bushel on Friday, though the March contract managed to post a weekly advance of 8 ½ cents, showing underlying support. Kansas City HRW futures retreated 2 to 3 cents at the close, with March contracts holding firm at a 4-cent weekly gain despite the day’s selling pressure. Minneapolis spring wheat pulled back 3 to 4 cents, while the March delivery maintained resilience with a 3 ¼-cent weekly appreciation. The divergence between daily losses and weekly gains highlights wheat’s volatile positioning ahead of the weekend.

Speculative Traders Adjust Positions in Response to Weakness

Data from the Commitment of Traders report revealed notable position changes in wheat futures and options as of January 27. Managed money traders in Chicago wheat moved to cover shorts, reducing their net short position by 15,957 contracts to 94,743 contracts. Similarly, speculative traders in Kansas City wheat trimmed 2,689 contracts from their net short exposure, bringing the total to 10,329 contracts. These adjustments suggest traders were reassessing bearish bets in the face of market uncertainty.

Export Sales Maintain Competitive Pace

Wheat export commitments reached 21.595 million metric tons through the reporting period, demonstrating strength in global demand. This figure runs 18 percent ahead of the corresponding week one year prior and represents 88 percent of the USDA’s full-season export forecast, tracking closely with the historical average pace of 89 percent. The robust export activity provides some fundamental support for wheat prices despite near-term technical weakness.

Week’s Wheat Futures Settlement Summary

As the trading session concluded Friday, the March CBOT wheat contract closed at $5.38, down 3½ cents, while May CBOT wheat settled at $5.46, off 4¼ cents. In Kansas City trading, March KCBT wheat finished at $5.44¾, down 2¼ cents, and May KCBT wheat closed at $5.55, declining 2¾ cents. Minneapolis wheat showed March MIAX trading at $5.78¼, down 3¼ cents, with May MIAX completing the week at $5.92½, off 3 cents. These session lows bookended a week that saw wheat navigate between dollar strength on one side and respectable export demand on the other.