December Chgo Wheat closed 9 ¾ cents lower ($4.89), March 9 ½ cents lower ($4.96 ¼) & July 8 ¼ cents lower ($5.06)
December KC Wheat closed 5 ¾ cents lower ($4.05 ¾), March 4 ½ cents lower ($4.19 ½) & July 4 ¼ cents lower ($4.38)
December Mpls Wheat closed 3 ½ cents lower ($5.29 ½), March 3 cents lower ($5.44 ¼) & July 4 ½ cents lower ($5.61 ½)
Overnight Egypt tenders for optional origin wheat – 925 K T. were offered – only 60 K T. were bought – French origin
Weekly Wheat Export Sales – old crop vs. 200-600 K T. expected – new crop vs. none expected
I think today’s outcome of the Egyptian tender acts as a tell all. Nearly 1.0 M T. were offered to them and they only took 60.0 K T. This tells me that one of the World’s biggest importers thinks prices are too high. Once again US origin was not offered suggesting US exporters think US prices continue to be out of the ballpark as far as being competitive. It seems the only business the US does is with our usual customers. As you can see from the above export sales estimates the trade is not expecting anything too exciting. Lately there has been a lot of talk about wheat prices making seasonal lows. Does that mean wheat prices are now bullish? Yes, lows may be in but that doesn’t make a market bullish. It is my thought wheat prices will develop into a trading range affair for the next number of months.
Advertised interior cash basis levels run mostly unchanged; Wichita saw a minor bump higher the other day. Gulf basis levels appear to be easing ever so slightly. Nearby Chgo intra-market spreads have been in a sideways to easing mode for the past week or so. Nearby KC spreads have been trending higher since early June. Today’s sell-off from Tuesday’s interim high just may be a harbinger of things to come over the near term. There’s an old adage that in many wheat areas that grow corn and beans may have to move some wheat out to make room for the new harvest.
The trend in Chgo wheat still reads higher but the inability to eclipse the $5.00 level (Dec) is sending out some warning signals. If KC wheat falls below today’s lows in a convincing manner it will suggest its party is over. What about Mpls wheat – it trades in a world of its own and that is due to a lack of liquidity. From Sept 1st it rallied 70 cents and since mid-last week it has already broken nearly 38 cents – that’s a little bit too flaky for me.
Daily Support & Resistance for 10/03
Dec Chgo Wheat: $4.80 – $4.96
Dec KC Wheat: $3.97 – $4.14
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.