July Chgo Wheat closed 2 ¾ higher ($4.92 ¼), Sept 2 cents higher ($4.95 ¼) & Dec 1 cent higher ($5.02)
July KC Wheat closed 3 ¼ cents higher (4.36), Sept 2 ¼ cents higher ($4.40 ¾) & Dec 1 ¾ cents higher ($4.53 ¼)
July Mpls Wheat closed 2 ¼ cents higher ($5.01 ¼), Sept ¼ cent higher ($5.13) & Dec 1 ¼ cents higher ($5.26 ¾)
Egypt announces an overnight tender for optional origin wheat – overnight Egypt buys 230 K T. Russian wheat – Average C&F price paid $218.80 vs. $218.40 on 6/18 vs. $227.25 on 6/10 vs. 220.65 on 6/02
Consolidation continues to be the name of the game here. The Egyptian tender featured aggressive offers from Russia despite another Russian Ag agency downgrading their crop size. European wheat market moved higher on further downgrades to the French crop. On Friday the USDA will update the US wheat crop, both winter and spring. The average guesstimate for total wheat production is down 31 million bu. from the June estimate. Despite this reduction the projected carryout is expected to increase by 24 million bu. This is a result of the higher than expected Quarterly Stocks that set the old crop carryout. That Stocks figure came in at 1.043 billion bu. The previous old crop carryout figure was 983 million bu. so it suggests the old crop carryout/new crop carryin will increase by about 60 million bu. Unless the USDA gives us some major surprise with the US data trade focus will move to the World data since US export origin is considered a secondary market (just my opinion). The new crop World carryout projection is expected to see to see a decline of 200-300 K T.
Wheat charts suggest consolidation. Whether or not this pattern will lead to higher prices remains to be seen. As I mentioned US wheat is considered to be a secondary export market so the mover will be what the USDA has to say about the world market. For the next few days I expect this consolidation pattern to continue.
Daily Support & Resistance – 7/08
Sept Chgo Wheat: $4.85 – $5.00 (?)
Sept KC Wheat: $4.32 – $4.50
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