Wheat Commentary

storck

Just My Opinion

Dec Chgo Wheat closes 1 ¾ cents higher ($3.89 ¼), March 4 cents higher ($4.08 ¼) and July 2 cents higher ($4.33)
Dec KC Wheat closes ¼ cent higher ($3.90 ¼), March ¼ cent lower ($4.08 ½) and July unchanged ($4.32 ½)
Weekly Wheat Export Inspections – 453.6 K T. vs. 275-475 K T. expected
ABARE (Australian version of our USDA) suggests Australia’s wheat crop is 32.64 M T. vs. previous estimate of 28.08 M T. – surpasses previous record sized crop of 29.6 M T. in 201112
It was a mixed day for trading the US wheat futures’ markets. The Chgo market found modest support from the sharp downside reversal in the US dollar as well as strength elsewhere in the Chgo Ag markets. The KC
market and the Mpls market were all about intermarket spreading as the KC market ran mixed while Mpls was lower. I have to think that most of the buying in the Chgo market was short covering as data that I follow suggested that after Friday’s trade the spec short was at or near its highest level for the past year. I think the KC market ran mixed due to recent rainfall in some of the drier areas of the south central Plains while the Mpls market was lower due to spread realignment. Overall the attempts to rally given the sharp break in the US Dollar is being overshadowed by the idea the world is flush with wheat and given what I am hearing out of the S. Hemisphere stocks will increase yet again on Friday’s USDA supply-demand update.
Interior cash wheat markets remain quiet as do the export markets down at the Gulf. The PNW markets look firm. Spreads were working in Chgo (March forward) due to the flat price short covering while KC spreads did not do much of anything.
After a round of new contract lows last week in the Chgo and KC markets we are currently seeing some minor attempts at recovery with emphasis on minor. I’m fearful that at the end of the week the USDA will incorporate the large Australian crop and that will weigh on the price action. As ugly as the market looks my impression is we continue to sell rallies back to resistance.
Daily Support & Resistance March Chgo Wheat: $4.03 ($4.00) – $4.14 March KC Wheat: $4.04 ($4.01) – $4.13 ($4.16)
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