Wheat Commentary
March Chgo Wheat closes 7 ½ cents higher ($4.26 ¼), May 7 cents higher ($4.39 ¼) and July 6 ¼ cents higher ($4.53 ½)
March KC Wheat closes 13 cents higher ($4.44 ¾), May 13 ¼ cents higher ($4.56 ¾) and July 14 cents higher ($4.68 ¾)
Weekly Wheat Export Sales – 391.0 K T. old crop vs. 250-450 K T. expected – no new crop vs. 0-25 K T. expected
Reports involving old crop wheat were bearish. US production data was left unchanged. Demand (feed & seed) was cut by 43 million bu.; this resulted in the US carryout increasing by a like amount. The World projected carryout increased by 1.15 M T. Quarterly Wheat Stocks came in higher than expected. The biggie to the USDA wheat reports was the winter wheat acreage figure; it came in 1.756 million less than expected and down 3.754 million acres vs. last year. I’m told this is the lowest US winter wheat acreage figure dating back to 1909. The greatest decrease came in the HRW acreage figure. See the attached “actuals vs. estimates” tables for the breakdown amongst the winter varieties. The breakdown will explain why the KC market was the big gainer vs. the Chgo market.
The interior cash wheat markets remain quiet. Export markets for wheat are quiet yet firm. In recent days the SRW export market is showing the best strength. Bull spreads in Chgo were getting back some of their recent easing. KC spreads were led by the new crop (the new crop acreage).
Daily technical indicators were reading high coming into today’s reports. The big question is now how much more short covering will we see before the market becomes legitimately over bought and we get some sort of a correction. Longer term – the new crop acreage will go a long way in suggesting we may be looking at long term lows.
Daily Support & Resistance for 01/13
March Chgo Wheat: $4.20 – $4.38
March KC Wheat: $4.37 – $4.52 ($4.56)
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