Dec Chgo Wheat closes 5 cents higher ($3.99), March 6 ¼ cents higher ($4.18 ¾) and July 5 ¼ cents higher ($4.46 ¾)
Dec KC Wheat closes 5 ¼ cents higher ($4.08), March 5 cents higher ($4.25 ½) and July 4 ¾ cents higher ($4.48 ½)
If you believe the US wheat market are trading range affairs you were buying wheat as your risk was minimal given the price’s proximity to recent/contract lows. The strength in the US Dollar was shrugged off for that reason and the idea that Monday’s break had been overdone. The improvement in the US winter wheat condition was a bit of a surprise to me but that saw little reaction. Long term traders still want to talk about lower US wheat acres for the coming season but so far that has failed to attract any attention given the US and global supplies. From a flat price standpoint one could say that US wheat rallied on Tuesday to catch up to the higher European prices. Unfortunately when the monetary conversion rates are applied US wheat continues to be overpriced vs. the competition. So for the time being we’ll go with the idea that the trading range affair lives on.
Interior cash wheat basis remains quiet. The export market for SRW is quiet as well. The export market for HRW, however, sees a noticeable jump. I’m not sure if this is in response to the lower flat price or is there some actual business about to take place. I do feel that shipments can’t get much more meager vs. what we saw on Monday. Chgo spreads within the current crop year had the Dec contract losing ground while the March and May contracts gained ground on the next crop year. KC spreads improved fractionally through the current year as well as vs. the new crop.
Recent lows/contract lows have been challenged and so far they hold. Like the rest of the Ag complex the recent rate of descent is showing signs of slowing. Dating back to early September Dec Chgo wheat has been a 40 cent trading range affair. The best approach has been one of fading short term inter-day extremes. No more hero for me – I’ll go with what has been working for the past 2 ½ months – fading those short term inter-day extremes.
Daily Support & Resistance Dec Chgo Wheat: $3.94 – $4.02 ($4.05) Dec KC Wheat: $4.03 – $4.12
Information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK involved in trading futures and or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL. This information is provided freely and is NOT in the capacity of a trading advisor. NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. Information provided is not to be construed as an offer to sell or solicitation to buy any commodity or security named herein.