Wheat Commentary
July Chgo wheat closes 4 ½ cents higher ($4.49 ¼), Sept 4 cents higher ($4.63 ¼) and Dec 4 ½ cents higher ($4.84 ½)
July KC Wheat closes 7 ¾ cents higher ($4.53 ¾), Sept 7 ¾ cents higher ($4.70 ¾) and Dec 7 ½ cents higher ($4.95 ½)
Weekly Wheat Export Sales – 1.883 M T. of undelivered old crop sales were rolled into the new crop – 461.0 K T. new crop vs. 350-550 K T. expected
Mpls wheat resumed its leadership role on Thursday as the call for extreme heat in the Dakotas over the weekend and into the first half of next week puts that crop in legitimate jeopardy. Yes, there is a chance of some scattered moisture late in the weekend and supposedly better moisture for the 2nd half of next week but I get the impression no one is really ready to bank on it. Harvest is happening in the HRW areas but that is being muted due to the strength of the HRS market. Chgo goes along for the ride but to a lesser extent. The trade is adding to existing longs in both the Mpls and KC markets while still covering shorts in the Chgo market.
It looks like the Chgo cash market may be reaching for some SRW while the Decatur, Indiana market is not so sure. The export market for SRW doesn’t look like much. The interior HRW market continues to show a firm tone especially in Oklahoma. The export market for HRW continues to ratchet higher as it looks for the good protein. Chgo spreads showed a fractionally bullish bias which in turn offset some of the effects of the ongoing index fun roll. KC spreads are fractionally firm up front; noticeably firm against their deferred contracts.
The daily charts are strong looking and not yet overbought. I think we need to focus on buying breaks back the previous congestion levels we just broke out of. Tomorrow’s USDA crop production update is not expected to show any major changes. If they do I have to think it’s a lower crop size. The Mpls contract will continue to be the leader as it is the spring crop that appears to be in jeopardy. I would like to think the current rally is not just another knee-jerk faker to the upside such as we saw in late April, early May.
Daily Support & Resistance for 06/09
July Chgo Wheat: $4.37 – $4.62
July KC Wheat: $4.40 – $4.65
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