May Chgo Wheat closed 6 ½ cents lower ($5.49 ¼), July 3 ½ cents lower ($5.47 ½) & Dec 1 ¾ cents lower ($5.58 ¼)
May KC Wheat closed 2 ½ cents lower ($4.73 ¼), July 1 ¾ cents lower ($4.80) & Dec 3 ¾ cents lower ($4.99)
May Mpls Wheat closed 2 ¼ cents lower ($5.24 ½), July 2 ¾ cents lower ($5.35 ¼) & Dec 2 ½ cents lower ($5.54 ½)
Flat price wheat sells off early from ideas the US winter crop is in better shape than originally thought. I also believe there was some technical selling involved as the Monday rally put prices into the thick of resistance that was established when market topped out early last week. Losses were trimmed as the day went on as there remains a fair amount of world business still happening even though the US is not getting much of it. France reports the lowest acreage planted to soft wheat dating back to 2003 as soils were too wet at planting time last fall. The trade continues to fear quotas being set by major exporters at least until their new crop becomes available. Adding to the trimming of losses was the sharp break in the US Dollar. It is my opinion the US Dollar is still too strong keeping US origin from being competitive in the world marketplace.
No changes are being seen with the interior wheat basis for standard protein. The Gulf basis for HRW remains steady with recent postings. The Gulf basis for SRW takes a noticeable hit at its midday posting. The nearby spread in Chgo sees a noticeable loss. The May/July Chgo spread is on the verge of going to a carry not seen since mid-March (basically when the March contract went off the Board). Since then the spread spiked to 24 cents over and now its back to 2 cents over. The May/July KC spread eases as well but have to notice The July led spreads had a bullish bias.
As far as I’m concerned the price action in the wheat charts looks like an upflagging effort back into the interim top that was established last week. If true we should see another round of selling until the trade starts thinking about the colder than normal temps forecasted for the next week or so. The USDA supply-demand report slated for Thursday’s release is not expected to show much of a change from last month’s data.
Daily Support & Resistance – 4/08
July Chgo Wheat – $5.40 – $5.58
July KC Wheat – $4.70 – $4.90
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