May Chgo Wheat closed 18 ½ cents lower ($5.50 ¼), July 14 ¾ cents lower ($5.47 ¾) & Dec 13 cents lower ($5.59 ¾)
May KC Wheat closed 18 cents lower ($4.75), July 17 cents lower ($4.82 ½) & Dec 14 ¾ cents lower ($5.03 ½)
May Mpls Wheat closed 14 ¾ cents lower ($5.24 ½), July 13 ¼ cents lower ($5.34 ¾) & Dec 13 cents lower ($5.54 ¼)
Weekly Wheat Export Sales – old crop vs. 100-500 K T. expected – new crop vs. 150-450 K T. expected
Yesterday we saw the Chgo wheat flat price stand in despite the nearby spread taking it on the chin. Today the nearby spread kept taking it on the chin and now took the flat price with it. Adding to the day’s bearishness was the renewed “risk off” attitude stemming from US administration suggesting the worst is yet to come from the coronavirus. In recent weeks we have seen a fair amount of global wheat business but the US has only seen minimal amounts of that business. We have seen some exporter countries set export quotas, not the US. If I had to guess it’s the US’ shortage of milling quality wheat that has kept us out of the mix. Okay, not everyone is interested in high quality milling wheat, what about feed wheat? The strength of the US Dollar has kept us out of that mix.
Wheat basis levels for standard protein wheat are on the defensive whether it is in the interior or for export. Chgo spreads get hit the hardest then again they were the strongest. So here you have it – basis levels are slipping, spreads are slipping and now the flat price is slipping.
Impressive looking technical sell signals were registered today. Interesting to note that it is the Chgo wheat market where the spec was a net long. No wonder it gets hit the hardest. Earlier this afternoon Egypt announced an overnight tender of optional origin wheat. Two hours later they cancelled the tender. That sounds like Egypt is thinking the price has further room to sell-off. Short term intra-day indicators suggest a bit of oversold after today’s performance. Any retracement from that idea is probably a selling opportunity.
Daily Support & Resistance – 4/02
July Chgo Wheat – $5.40 – $5.55
July KC Wheat – $4.75 – $4.90
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.