March Chgo Wheat closed 7 ¼ cents lower ($5.21 ½), May 9 cents lower ($5.18 ¼) & July 8 cents lower ($5.19 ½)
March KC Wheat closed 5 ¾ cents lower ($4.46 ¼), May 5 cents lower ($4.53 ¼) & July 5 cents lower ($4.60)
March Mpls Wheat closed 3 ¾ cents lower ($5.16), May 4 ¾ cents lower ($5.29 ¼) & July 4 ½ cents lower ($5.38 ¾)
Weekly Wheat Export Sales – old crop vs. 350-600 K T. expected – new crop vs. 25-75 K t. expected
Flat price wheat continues to be in a liquidation mode as it takes its cue from slack looking EU and Black Sea prices. Not only are Chgo wheat futures seeing flat price liquidation but liquidation from the inter-market spreads that featured long wheat. I have to think the global wheat trade has slowed down from what it was just a couple of months ago. Back in January Russia came up with a plan to limit exports to 20.0 M T. for the balance of their marketing year. It is now thought that Russian wheat sales for the balance of the marketing year will not come close to that 20.0 M T. mark. Another example of the slowdown in the global wheat trade is the absence of Egypt. Here we have prices at near 3 month lows and not a peep out of them.
Interior cash wheat markets continue to firm to outright strong. The SRW crop last was so poor in quality that if one has quality he is not letting it go. The HRW cash market has firmed with the break in the flat price as producer selling has slowed dramatically. March Chgo wheat has yet to see any deliveries but that’s only helping the March/May spread as the May forward spreads are under pressure. In KC we see the same 9 contracts circulating since day one deliveries. KC spreads are showing a bit of bearish bias but nowhere near the extent that we are seeing in Chgo.
As much as the recent price performance leaves a lot to be desired I’m still with the frame of mind that there is not much left on the downside to the current wave lower. I would like to think July Chgo wheat is no worse that $5.10 on the current break. The same holds true for July KC against the $4.55 to $4.50 level.
Daily Support & Resistance – 3/05
July Chgo Wheat – $5.14 – $5.27
July KC Wheat – $4.54 – $4.65
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.