Wheat Commentary
May Chgo wheat closes 24 ¼ cents higher ($4.42 ¾), July 23 ¾ cents higher ($4.56) and Dec 21 ¾ cents higher ($4.90)
May KC Wheat closes 28 cents higher ($4.52 ¾), July 28 ½ cents higher ($4.65 ¾) and Dec 24 ½ cents higher ($5.01 ½)
Weekly Wheat Export Inspections – 574.5 K T. vs. 400-600 K T. expected
Winter Wheat Condition – 54% GE (unch) vs. 53% expected vs. 61% year ago – Headed – 42% vs. 40% last year vs. 34% 5-year average
Spring Wheat Planting Progress – 31% vs. 33% expected vs. 52% last year vs. 46% 5-year average – Emergence – 9% vs. 20% last year vs. 17% 5-year average
Major snow storms in the HRW areas and flooding in some of the SRW areas sends the Chgo and KC markets soaring on Sunday night, Monday. I’ve always been told the only way you can hurt the wheat crop is with a flame thrower – what about 18 inches of snow in late April for HRW or flooding conditions in the SRW? Adding to the weather woes was the spec was just too short for his own good. I can’t tell you how many people I talked to last week that dismissed the noticeable reversals that occurred last Tuesday. Until we get a better handle on the weekend weather and its impact on the crop the bias will be for higher prices.
Interior cash prices don’t do much. I get the impression no one is real sure of the weekend weather’s impact on the crop. Once the buyer has a better realization then we’ll see changes in the interior bids. Spreads were strong but that’s all about short covering.
July Chgo wheat appears to be on its way to $4.70. The gap higher opening occurred just above the downtrend line that had been in place dating back to mid-late February. In early March the KC market was much stronger vs. Chgo so its initial downtrend line is much higher than Chgo’s. Today’s rally in the July KC fell just short of that trendline; roughly $4.69. If we go through that level $4.80 is probably the next stop. Short term inter-day data reads pretty overbought. With that said some backing and filling of Monday’s rally would not be out of the question. The Wheat Quality Council supposedly started to day in Kansas. I’m sure most everyone that trades wheat will be anxiously waiting to see what they have to say – I know I will be.
Daily Support & Resistance for 05/02
July Chgo Wheat: $4.45 – $4.61 ($4.70)
July KC Wheat: $4.55 – $4.70 ($4.80)
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