May Chgo Wheat closed 2 cents lower ($5.46 ¾), July 1 ¼ cents lower ($5.46 ¼) & Dec 3 ¼ cents lower ($5.55 ¾)
May KC Wheat closed 1 ½ cents higher ($4.96 ¾), July 1 ¾ cents higher ($5.04) & Dec 1 cent higher ($5.19)
May Mpls Wheat closed 5 ¾ cents lower ($5.05), July 5 ¼ cents lower ($5.7 ¾) & Dec 5 ¼ cents lower ($5.40 ¾)
Despite many believing wheat has its own bull case it did get caught up in this morning’s whoosh to the downside. The “however” is that it was the first market to recover from its morning lows. Granted Chgo struggled to get to the plus side while KC was successful. Going forward we still have to deal with the tight supply in the Black Sea region until new crop becomes available. We cannot forget that acreage will be down in the US as well in the EU. It was just the other day Russia lowered its crop size due to its ongoing dry bias. With all of this said I still think this market has further upside potential.
Advertised basis levels for standard protein wheat run unchanged on the day. Remember that Toledo jumped their basis by 10 cents for SRW. Not much happens with the Gulf basis then again our export wheat program hasn’t been all that exciting. In Chgo May eases to July but July is a noticeable gainer going forward. KC spreads show fractional improvements.
Despite today’s mixed two-sided price action it remains my belief that wheat still has upside potential at least until we can get a better handle on not only the US new crop but our competitors’ new crop as well. Until we can solve that unknown my bias is for higher prices. Chart action is no worse that sideways for now. My focus is on breaks to suspected support levels.
Daily Support & Resistance – 4/22
July Chgo Wheat – $5.42 – $5.58
July KC Wheat – $4.98 – $5.10 (?)
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