July Chgo Wheat closed 2 cents higher ($5.11 ¾), Sept 2 cents higher ($5.04 ¾) & Dec 1 ¼ cents higher ($5.16 ¾)
July KC Wheat closed ¾ cent higher ($4.41 ¼), Sept 2 ¼ cents higher ($4.41 ½) & Dec 1 ½ cents higher ($4.62 ½)
July Mpls Wheat closed 4 ¼ cents lower ($5.22 ½), Sept 2 ¼ cents higher ($5.28 ¾) & Dec 1 cent higher ($5.42)
Weekly Wheat Export Sales – old crop vs. 250-550 K T. expected – new crop vs. none expected
Wheat futures register a relatively quiet two-sided trade on Wednesday. I’m under the impression the strength we saw was pretty much in response to the strength in the other Ag markets. Not much is expected on the production/supply-demand update tomorrow. Production is expected to increase by 5 million bu. while carryout is expected to decline by 29 million bu. The carryout decline is being attributed to the lower carryin; down 27 million bu. This year’s carryin was set by the June 1st quarterly stocks figure, 1.072 billion bu. We continue to hear of a lower Russian wheat production figure but it is still above last year. A similar scenario is holding true for EU wheat production; some easing of earlier production ideas but higher vs. last year. As of this writing it is my thought US wheat futures will continue to be a follower of strength and or weakness elsewhere within the Ag complex.
Sales off of the combine remain slow. Interior basis changes remain slight. If I had to point out a trend in the interior basis I would say the SRW market is a bit firm while the HRW market is a bit soft. The Gulf market for wheat remains quiet despite recent healthy looking shipments. I’m told the shipments are results of deals made long ago. Chgo spreads appear to move in tandem with the flat price while KC spreads appear to be going nowhere fast.
Chgo wheat charts look like they want to go lower while KC wheat charts are trying to suggest they have gone low enough for now. Both markets show better looking support down another 20 cents while both show good looking resistance up 20-30 cents. With that said put on your trading shoes and fade the shorter term intra-day and inter-day extremes for short term trading opportunities as Just don’t see any longer term dynamics here.
Daily Support & Resistance for 07/11
Sept Chgo Wheat: $4.95 ($4.90) – $5.20
Sept KC Wheat: $4.30 ($4.20) – $4.55
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.