May Chgo Wheat closed 8 ½ cents lower ($5.40 ¼), July 9 ¼ cents lower ($5.40 ½) & Dec 8 cents lower ($5.54 ½)
May KC Wheat closed 4 ¼ cents lower ($4.79 ½), July 4 cents lower ($4.87) & Dec 4 ¾ cents lower ($5.04 ¾)
May Mpls Wheat closed 7 cents lower ($5.14), July 6 ½ cents lower ($5.27) & Dec 6 cents lower ($5.48 ½)
Egypt announces another overnight tender for optional origin wheat
Weekly Wheat Export Sales – old crop vs. 150-350 K T. expected – new crop vs. 100-300 K T. expected
Spec liquidation rules the day whether it’s in the flat price or with the spreads (both inter-market and intra-market). The inability to confirm any damage from the weekend freeze in the US southern Plains winter wheat areas, better conditions in European wheat growing areas and the forecasts for beneficial moisture in the dry Russian wheat areas all worked together to prompt the spec liquidation. Egypt is going to try it again tonight to see if they can get better/additional offers vs. what they got the other night. Don’t be surprised if offers stay high given all of the quotas that are being enacted overseas. The US has decent FOB offers but freight will kill the deal once again.
Advertised interior basis levels continue to run unchanged for standard protein wheat. This holds true for the Gulf as well. The May/July Chgo spread traded at a 4 cent carry before the realization set in that we still don’t have any quality SRW for May delivery. We have not seen that much carry dating back to last November. It is my thought that the May/July Chgo spread has seen its worst until we get a better handle on May deliveries meaning will we see HRW or spring delivered.
My call for Thursday’s wheat trade is to see an inside day of today for the Chgo market. I would not be surprised to see KC give back some of its near 20 cent gain on Chgo that has occurred or the past 5 days.
Daily Support & Resistance – 4/16
July Chgo Wheat – $5.34 – $5.46
July KC Wheat – $4.79 – $4.92
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.