Wheat Commentary
July Chgo wheat closes 4 ¾ cents lower ($4.29 ½), Sept 4 cents lower ($4.44) and Dec 3 ½ cents lower ($4.66 ¼)
July KC Wheat closes 5 ½ cents lower ($4.30 ½), Sept 4 ¾ cents lower ($4.48 ¼) and Dec 4 ½ cents lower ($4.74)
Harvest has started in Texas and in parts of Oklahoma. Yields are a bit subject right now and the concern around abandoned acres has yet to be solved. Yesterday’s improvement in the Kansas crop weighed on prices Tuesday. Another item of consideration is quality especially when one moves into the soggy areas of Oklahoma and Kansas. The problem trading quality is that it does not necessarily affect quantity. One can have quantity but with poor quality – then it could become a spread play as none of the new crop supplies would delivery specs.
Interior cash wheat markets remain quiet. Not much is happening with SRW at the Gulf while HRW at the Gulf continues to show a steady to firmer bias. Wheat spreads in both Chgo and KC moved lower with the renewed spec selling.
As much as I feel the US wheat markets are grinding out long term bottoms it is quite apparent the managed money sector does want to give up the ship with their sizable net short positions. Given the recent price action of the past couple of days I’m thinking that if we can take out and close above Monday’s highs we may get them on the run. Smart money management says I may have to give up on my idea of bottoming if we see closes below last week’s lows.
Daily Support & Resistance for 05/24
July Chgo Wheat: $4.26 – $4.38
July KC Wheat: $4.28 – $4.40
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.