May Chgo Wheat closed 8 ¼ cents lower ($4.18 ½), July 6 ½ cents lower ($4.28 ¾) & Dec 5 ¾ cents lower ($4.55)
May KC Wheat closed 3 ½ cents lower ($3.86 ¼), July 3 cents lower ($3.94) & Dec 2 ¾ cents lower ($4.28)
May Mpls Wheat closed ½ cent lower ($4.90 ¼), July ½ cent lower ($5.07), & Dec 1 cent lower ($5.31 ½)
1st Notice Day Chgo Wheat Deliveries – 1016
1st Notice Day KC Wheat Deliveries – 0
1st Notice Day Mpls Wheat Deliveries – 924
The Wheat Quality Council is finding strong yields in the north Kansas swing of their tour. Chgo and Mpls saw big deliveries (1016 and 924 respectively); none for KC. World wheat prices continue with their swoon lower. The condition of the US winter wheat crop continues to improve. Demand for US wheat continues marginal at best. Add all of the aforementioned together and it serves as the rationale for the across the board contract lows. Now we have to ask the question; “Just how short is the spec willing to get?” I know the idea is that an improved yield will go far in offsetting the lower acres but the crop is not yet made. We have problems getting the spring crop in the ground. Forecasts are suggesting flooding potential in some of the winter wheat areas HRW included.
Advertised basis levels for standard protein don’t show much but as I read between the lines there is some underlying firmness. Chgo spreads were firm for March and most of April; showing signs of breaking down now. KC spreads are showing similar price action. I have to think that if the spec ever goes into a flat price short covering run these intra-market spreads will firm as well.
The 14-day RSI for July Chgo wheat is 28; for July KC 23. These may read low to you but they are not extreme. Daily momentum indicators read low as well but not extreme. I can’t be short at current levels but then again there is nothing in the price action that would suggest otherwise. If and when this market turns there will be no advance notice – it will come as 1, 2, 3 cover.
Daily Support & Resistance for 05/01
July Chgo Wheat: $4.25 (?) – $4.38
July KC Wheat: $3.90 – $4.05
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