May Chgo Wheat closed 1 ¼ cents higher ($4.64), July ½ cent higher ($4.68 ½) & Dec ¼ cent lower ($4.89 ¾)
May KC Wheat closed 1 ¼ cents lower ($4.33 ¼), July 1 ½ cents lower ($4.40 ¾) & Dec 1 ½ cents lower ($4.72)
May Mpls Wheat closed 11 ¼ cents lower ($5.41 ¾), July 8 ½ cents lower ($5.47 ¾), & Dec 5 ¼ cents lower ($5.70)
Today’s trade was all about inter-market spreading; Chgo gains on KC and KC gains on Mpls. So what’s behind all of this? Chgo is the firmest on a questionable SRW crop (too much moisture). KC loses to Chgo due to the good condition of the HRW crop. Mpls loses to everybody as planting concerns in N. Dakota are easing due to recent drying (as well as a slow melt). Going forward I have think Chgo will sustain its premium on KC given the conditions of the SRW crop vs. the HRW crop. I do, however, question the markets’ ability to sustain a flat price rally as long as the majority of the winter crop is in good condition as well is our competitors crop.
Not much happens in the wonderful world of cash wheat. The interior market remains quiet. Export values for HRW are slipping while SRW values run unchanged. Chgo spreads had a bit of a bullish bias given the minor short covering while KC only saw fractional changes; more mixed that anything else.
Chgo wheat manages to stand in as it supports against Friday’s lows. With that said I don’t think anyone trying to be friendly wants to see prices close below Friday’s low. KC finds support against its lows made in early March. If KC takes out those lows it will take Chgo down with it. The bottom line to all of this – a trading range type market is developing until more is known as to the development of the new crop. My best approach to this type of market is to fade the shorter term inter-day extremes. Chasing these shorter term extremes will lead to nothing but frustration.
Daily Support & Resistance for 04/03
July Chgo Wheat: $4.58 – $4.78
July KC Wheat: $4.35 – $4.52
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.