December Chgo Wheat closed 5 ½ cents lower ($5.18), March 5 ¼ cents lower ($5.24 ¼) & July 4 ¼ cents lower ($5.33 ½)
December KC Wheat closed 4 ¼ cents lower ($4.21 ¼), March 3 ¾ cents lower ($4.34 ¾) & July 3 cents lower ($4.53)
December Mpls Wheat closed 1 ¼ cents higher ($5.39), March 1 ½ cents higher ($5.52 ¾) & July 2 cents higher ($5.68 ¾)
Despite a fair amount of world wheat business happening around us and European wheat prices staying firm US wheat prices resumed the correction phase they started yesterday. Initially US wheat futures rallied Monday night on the coattails of the higher soybean while the day session brought us a resumption of profit taking. As we speak Algeria is holding what could be another large tender so the outcome, meaning prices paid, will be a cue for not only European and Black Sea wheat prices but for US prices as well. Algeria tenders similar to Egypt as they announce a tender for 50.0 K T. but more times than not will take larger quantities depending on need and price.
The SRW basis edges higher on the Ohio River while the Gulf edges lower. Chgo spreads continue to ease as the upfront spec selling pressures the spreads. The HRW basis runs unchanged vs. Monday’s postings but their spreads also ease with the upfront spec selling. It seems the quality issues are taking a breather right now but I have to think that once we get closer to considering December deliveries the bull spreads will once again rear up on their hind legs.
The suggested downside reversals that occurred on Monday were honored on Tuesday. I see a smattering of support for Dec Chgo at the $5.15 level but much better down towards $5.05. $4.16 represents initial support for Dec KC but it too shows better at lower levels; something closer to $4.08. Unless world wheat prices vault dramatically higher from current levels my thought is that we just may have established some highs that could be in place for the next number of weeks.
Daily Support & Resistance for 10/23
Dec Chgo Wheat: $5.14 (?) – $5.28
Dec KC Wheat: $4.16 (?) – $4.28 ($4.31)
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