May Chgo Wheat closed 2 ½ cents lower ($4.65 ¼), July 1 cent lower ($4.68 ¾) & Dec ½ cent higher ($4.92 ½)
May KC Wheat closed ¼ cent higher ($4.31 ½), July 1 cent higher ($4.39) & Dec 1 ½ cents higher ($4.71 ½)
May Mpls Wheat closed 1 ½ cents higher ($5.24), July unchanged ($5.31 ¾), & Dec ¾ cent lower ($5.56 ½)
Weekly Wheat Export Inspections – 538.8 K T. vs. 300-600 K T. expected – Cumulative 19.389 M T. – Target 26.26 M T.
US Spring Wheat Planted – 1% vs. 3% expected vs. 5% 5-year average
US Winter Wheat Conditions – 60% GE vs. 56% expected vs. 30% year ago – Headed – 3% vs. 4% 5-year average
Once again its all about the different varieties as inter-market spreading is once again very noticeable. Flat price for all of the varieties tried to rally early but failed to sustain the rally attempt. The failure to sustain the rally, I think, goes to the idea of a bearish looking projected old crop carryout scheduled for tomorrow. Trader estimates suggest a 20 million bu. hike in the carryout. I’m a bit surprised the Mpls market could not hold its rally given the short term forecasts for the Northern Plains. The SRW (Chgo) market is still looking at the possibility of a poor quality crop while the HRW (KC) crop is looking good but with low acres. I have to wonder if current conditions stay as good as they are through harvest will a better yield offset the lower acres.
Interior cash wheat markets remain quiet. This holds true for the export market as well. Chgo spreads had a bearish bias out to March 2020. KC spreads showed a steady to easier bias nowhere as noticeable vs. the Chgo spreads.
Trading range, trading range is my bias for the flat price wheat markets. Take out $4.60 on a closing basis (July Chgo) and we could see $4.50. I don’t think it could take much to pump out new contract lows in KC; just another 12 cents down. We all know that SRW quality and quantity could be subject. We know HRW acres are down. We know that HRS may have a hard time getting planted in a timely manner. So why is the recent price action so questionable looking. It’s my idea that the rest of the World is in great shape and since I believe the US wheat market is a secondary we have to follow the competition’s lead.
Daily Support & Resistance for 04/09
July Chgo Wheat: $4.59 (?) – $4.76 ½
July KC Wheat: $4.30 – $4.46
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