Dec Chgo Wheat closed ¾ cent lower ($5.49 ½), March ½ cent lower ($5.56 ½) & July 1 cent lower ($5.61)
Dec KC Wheat closed 6 ¾ cents lower ($4.76), March 6 ¾ cents lower ($4.86) & July 6 ½ cents lower ($5.00 ¾)
Dec Mpls Wheat closed 5 cents lower ($5.24 ½), March 4 ¾ cents lower ($5.37 ¼) & July 3 ¼ cents lower ($5.55 ¾)
Chop, Chop, Chop – US Wheat futures appear to be going nowhere fast. The biggest feature of the day was the resuming liquidation of the long KC/Short Chgo spreads. The second day of US Dollar easing provided no spark. There are still concerns of dryness in the sowing of winter wheat in selected regions of the World but that did not get any play today as there are rains in the forecast for Ukraine and southern Russia. The winter wheat areas of the US, central and southern Plains, remain dry.
Cash markets, both interior and for export remain quiet. Not much intra-market spread changes were seen in either Chgo or KC.
Tomorrow’s USDA reports will deal with wheat quarterly stocks as well as a US production update. US quarterly wheat stocks are expected to be in the range of 2.242 billion bu. down about 100 million bu. vs. one year ago. My guess is that this decrease has been accounted for as US wheat futures are about 60 cents higher vs. where we were one year ago. The production update has the trade not looking for much of change. In August the USDA suggested US production was 1.838 billion bu. and now the trade is guesstimating production at 1.841 billion bu.
As I mentioned yesterday I’m not sure what to make of the recent price action other than we may be developing into a trading range affair. My best approach to trading range markets is to fade short term inter-day and intra-day extremes for short term trading opportunities (and I really didn’t see any of those today).
Daily Support & Resistance – 9/3
Dec Chgo Wheat: $5.40 – $5.57
Dec KC Wheat: $4.67 – $4.88
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.