March Chgo Wheat closed 2 ½ cents higher ($5.28 ¾), May 4 cents higher ($5.27 ¼) & July 3 ¼ cents higher ($5.27 ½)
March KC Wheat closed 1 cent higher ($4.52), May ½ cent higher ($4.58 ¼) & July ¾ cent higher ($4.65)
March Mpls Wheat closed 7 ½ cents higher ($5.19 ¾), May 5 ¾ cents higher ($5.34) & July 5 ¾ cents higher ($5.43 ¼)
Flat price wheat continues to be a crowd follower but the long liquidation remains present. Wheat spiked higher with the rest of the Ag sector Tuesday morning but was the first to retreat from its highs. World prices continue to show a bearish bias. Yesterday afternoon the USDA reported better conditions for the Southern Plains HRW crop. There is already talk that the Northern Plains HRS plantings will come up short due to excessive wetness; still a lot of snow on the ground and the melt is very very slow. It will be interesting to see how the competitions crops come along; we know the EU winter acreage is down and the Black Sea winter acreage is susceptible to a late season cold snap because it has been relatively warm all winter in the area of the world.
The advertised basis levels SRW continue to be strong. They will stay strong until we have a better idea of the quality of the new crop and that is some time off. Advertised basis levels for HRW hold steady with a firm bias due to slow cash related selling. The export basis for HRW continues to show affirm bias while not so much for SRW. If one looks a that the breakdown of recent export shipments you will see not much SRW business. We’ve yet to see any deliveries against the March Chgo contract but that spread did soften today. May is holding sway over the new crop. Once again not much happens with the KC spreads.
July Chgo wheat looks like a simple upflag off of last week’s lows. Market making resistance doesn’t start until $5.40 if not higher ($5.45 to $5.50). the best looking support is down 10-12 cents. The July KC market’s price action suggests resistance 10-15 cents higher and support 10-12 cents lower. For the near term I have to think the best approach to trading the wheat markets is fading the shorter term technical indicators – 60 minute charts, 90 minute charts. Just remember that using the shorter term indicators also means shorter term positions in the market.
Daily Support & Resistance – 3/04
July Chgo Wheat – $5.18 – $5.35
July KC Wheat – $4.44 – $4.59
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