Dec Chgo Wheat closes 9 cents lower ($3.94), March 9 cents lower ($4.12 ½) and July 10 ¾ cents lower ($4.41 ½)
Dec KC Wheat closes 7 ½ cents lower ($4.02 ¾), March 7 ¼ cents lower ($4.20 ½) and July 7 cents lower ($4.43 ¾)
Weekly Wheat Export Inspections – 191.0 K T. vs. 400-600 K T. expected
A surging US Dollar and feeble looking export demand for US wheat says it all. It is interesting to note that most of our competitors’ wheat prices finished higher on the day. Their lower currency (Euro) vs. the higher US Dollar makes their wheat look much more attractive despite the lower flat price for the US wheat. Additionally the US wheat market, especially the Chgo market, continues to be most traders’ favorite short on any inter-market Ag spread.
Interior US cash markets continue to be quiet. The recent break has firmed the HRW export market ever so slightly. It was just a few days ago the nearby Chgo spreads were on the verge of registering a buy signal – not so anymore. Despite this bull spreads, old crop vs. new crop, were working noticeably on Monday. KC spreads had been trying to firm ever so slightly – not so anymore. The old crop/new crop spreads in KC continue to show a widening bias.
The trade had been thinking unchanged ratings to the recently planted (94%) US winter wheat crop. The USDA suggests otherwise – 59% GE (+1%), 32% Fair (-1%) and 9% P-VP. Rains last week in the central southern Plains were deemed beneficial.
So how low can you go? Dec Chgo wheat is knocking at the door of the Oct 1st low ($3.90) and only a handful of cents away from the Dec contract low, $3.86 ¾. The KC picture is similar; its October low was $3.97 and its contract low was $3.95. It was just mid-last week when I was trying to develop a friendly bias to the market and I warned the last time I had tried that I got it stuffed – guess who got stuffed again? The bottomline is the price action is just absolutely awful. Maybe contract lows will offer some support.
Daily Support & Resistance Dec Chgo Wheat: $3.90 ($3.86) – $4.02 Dec KC Wheat: $3.97 ($3.95) – $4.09
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