Wheat Commentary
July Chgo wheat closes 9 cents higher ($4.46), Sept 9 cents higher ($4.59 ¼) and Dec 9 cents higher ($4.80)
July KC Wheat closes 8 cents higher ($4.46), Sept 7 ¼ cents higher ($4.63) and Dec 7 cents higher ($4.88)
Weekly Wheat Export Sales – old crop vs. -300-0 K T. expected – new crop vs. 350-550 K T. expected
Despite the recent leader, the Mpls wheat market, going into a minor corrective phase on Wednesday the Chgo market and the KC market continue to scoot higher. The Chgo market is all about short covering while the KC market is all about adding to existing long positions. The USDA will update US winter wheat production on Friday – the trade is expecting to a 7 million bu. reduction in winter wheat and only a 5 million bu. reduction for total wheat production. Given the poor start to the spring wheat crop the total wheat production figure is questionable.
No changes are being noted in the interior cash wheat markets. If there is a bias it’s for the HRW market – firmer. The Gulf basis for HRW continues to be firm while the SRW market is softer. Wheat spreads were flat across the Board in Chgo while a touch better in KC.
Short term inter-day technical considerations suggest the wheat market is rather high. Daily data does not. What this tells me is that I don’t have to chase the rally to participate. Volatility is increasing with the rally – this further suggests corrections in the rally will come albeit maybe fast and furious. I’ll continue with my focus of buying breaks back down to recently established support levels.
Daily Support & Resistance for 06/08
July Chgo Wheat: $4.34 – $4.50 (?)
July KC Wheat: $4.35 – $4.52 (?)
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.