Wheat Commentary

storck

Just My Opinion – Wheat

Wheat Commentary

Dec Chgo Wheat closes ¼ cent lower ($4.53 ¾), March¼ cent lower ($4.73 ½) and July 1 cent higher ($4.98 ½)

Dec KC Wheat closes 1 ¾ cents lower ($4.52 ¼), March 2 cents lower ($4.70) and July 1 ½ cents lower ($5.00)

Flat price wheat tries to extend its current short covering rally but fell back on Tuesday after new highs for the move failed to ignite further short covering. On Friday the USDA will update this past season’s crop size and the trade is looking for a reduction of 21 million bu. vs. the USDA’s August estimate. In addition the USDA will give a quarterly wheat stocks figure that is currently being estimated at 2.205 billion bu.; down 340 million bu. from the previous year. This may sound like a lot but one has to look at the market from a global point of view and when that’s done it’s a bit hard to chase to chase rallies. So far the best support the wheat market has seen is speculative short covering; not the best kind of buying. The end of the quarter also occurs on Friday. It is not out of the norm to see position squaring going into that date; meaning in this case the potential for short covering to keep the market from sinking.

Interior cash wheat markets continue to see little if any changes; even the bids for better protein have been quiet. Not much happens with the export market for SRW. The export market for HRW continues to hold on to recent gains. Chgo wheat spreads ran steady to fractionally easier after recent gains. This pattern is holding true for the KC market as well.

Okay – flat price wheat challenges suspected resistance and gets turned back. The price action has been a very organized channel higher dating back to late August. Tuesday’s new highs for the rally followed by a slightly lower close are not the best looking type of price action. It is my idea this market is not going roll over until the trade sees what the USDA has to say on Friday while I am thinking today’s highs will be it until then.

Daily Support & Resistance for 09/27

Dec Chgo Wheat: $4.44 – $4.59

Dec KC Wheat: $4.44 – $4.58

 

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