Wheat Commentary
Dec Chgo Wheat closes 4 ½ cents higher ($4.54), March 4 ¼ cents higher ($4.73 ¾) and July 3 ¼ cents higher ($4.97 ½)
Dec KC Wheat closes 3 ¾ cents higher ($4.54), March 4 cents higher ($4.72) and July 4 cents higher ($5.01 ½)
Weekly Wheat Export Inspections – 499.9 K T. vs. 350-550 K T. expected
Weekly Winter Wheat Progress – 24% Planted vs. 26% expected vs. 28% 5-year average
US wheat futures move higher (mostly speculative short covering) on Monday taking their cue from higher Russian and European wheat prices. It was interesting to note that shortly after the Sunday night opening wheat prices traded as much as 5-6 cents lower. We need to realize that the US is no longer the leading world exporter as we have taken a back seat to the EU, Russia and the FSU. The US has now become a follower, no longer a leader. On Friday the USDA will update this past year’s US wheat production. The most recent traders’ survey suggests this year’s wheat crop will decline by 15 million bu. vs. the USDA’s August estimate. The spring wheat crop is expected to be the primary decliner. Quarterly stocks are expected at 2.203 billion bu. vs. 2.545 one year ago.
The interior cash wheat basis remains quiet. Not much happens with the SRW export market while the HRW export market remains firm. Since the middle of August Chgo wheat spreads have been drifting higher; nothing major though, 4-5 cents. KC spreads had an initial jump in late August and have literally inched higher since then.
Chgo wheat gives us new high close for the rally that on August 29th (but not new highs – missed that a fractions). The price action looks like a well-organized channel higher. The mid-high $4.50’s to the low $4.60’s represents resistance as these levels were previous lows dating back for 9 months. The price action in KC is similar; maybe a bit stronger looking as Monday saw not only new high closes but new highs for the current rally. I’m a little skeptical about chasing the current rally given the report at the end of the week.
Daily Support & Resistance for 09/26
Dec Chgo Wheat: $4.47 – $4.61
Dec KC Wheat: $4.47 – $4.61
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