Sept Chgo Wheat closed 2 ¼ cents lower ($5.13 ¾), Dec ¾ cent lower ($5.32 ¼) & March ¾ cent higher ($5.49 ½)
Sept KC Wheat closed 2 ¼ cents higher ($5.10 ¾), Dec 3 cents higher ($5.36 ¾) & March 3 ¾ cents higher ($5.55 ¼)
Weekly Wheat Export Inspections – 397.8 K T. vs. 300-500 K T. expected
Weekly Winter Wheat Progress – 80% harvested vs. 83% expected vs. 79% 5-year average
Weekly Spring Wheat Condition & Progress – 79% GE (-1%) vs. 80% expected vs. 33% year ago – Headed – 96% vs. 93% 5-year average
In the early going US wheat futures run higher prompted by the continued strength in the European prices as well as the Black Sea prices. It was interesting to note that once the European market closed US wheat futures began to sell off. I’m calling it profit taking due to short term overbought considerations. The idea is that if Europe and the Black Sea are having short crops it suggests the potential for better US business. We have yet to see any increase in US export interest as evidenced by the recent uninspiring sales and shipments.
Interior cash wheat bids are running unchanged while having a firm tone. The export market for SRW remains quiet. The export market for HRW is easing. Bear spreads were noticeably working in Chgo – I have to think that’s tied to the lack of business. Bear spreads were working in KC as well. It needs to be noted that bear spreads were working in both markets even when the flat price was rallying early in the day. That suggests to me the rally has been spec driven and not demand driven.
In the last week and a half Chgo wheat futures have rallied about 50 cents. The corresponding rally in KC has been closer to 45 cents. We have yet to challenge what I call significant looking resistance but just the amount of rally in the relatively short period of time suggests the flat price is ripe for some minor correction. As long as our competitors’ prices are go-ng up we will follow. I have to think that once the competition is done going up US prices will break even harder. That’s what happens when you’re a follower, not a leader.
Daily Support & Resistance for 07/24
Sept Chgo Wheat: $5.02 ½ – $5.20
Sept KC Wheat: $4.98 – $5.16
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