Wheat Commentary
Dec Chgo Wheat closes 6 ½ cents lower ($4.55), March 6 ½ cents lower ($4.74 ¼) and July 5 ¾ cents lower ($4.98 ¾)
Dec KC Wheat closes 6 cents lower ($4.53), March 6 ½ cents lower ($4.70 ¾) and July 5 ¾ cents lower ($5.01)
Weekly Wheat Export Sales – 435.6 K T. old crop vs. 250-450 K T. expected – no new crop vs. none expected
IGC increases the World wheat crop to 748 M T. vs. the USDA at 744.85 M T.
Looks good one day; doesn’t follow through. Looks bad the next day; doesn’t follow through. Thursday is one of those days where prices looked good on Wednesday but failed to follow through the next day. Because the US wheat market is follower of our global competitors it makes for a herky-jerky trade. If you noticed I made reference to the IGC and their global wheat production estimate. It has been my experience that IGC more times than not trails the USDA as to global production. I can’t remember the last time they had a higher figure such as they do now. Tomorrow the USDA will update US wheat production. Most everyone is expecting to see a lower “spring” number – the question is by how much. The average trade guesstimate is looking for a 20 million bu. reduction. I’m not sure if the USDA will address harvested acres on this report or if they will wait for the October Supply-Demand update. Earlier this season many in the trade were expecting to see lower harvested acres. The average trade guess for Quarterly Stocks is 2.205 billion bu.; 345 million bu. less than one year ago. I think this is being muted do to the fact that our export competition has taken over the leadership.
Interior cash wheat markets remain quiet. Little happens with SRW at the Gulf while the HRW export market is quiet but with relatively firm bids. Wheat spreads are showing a softer bias following recent firming action.
Flat price wheat remains in a well-defined up channel but is bumping up against suspected resistance levels. Prices have been grinding higher since mid-late August. I’ve always been skeptical of chasing rallies in this market and right now is no different. Channel lines have been plotted and we’ll act accordingly. In short – fading price spikes in either direction.
Daily Support & Resistance for 09/29 Dec Chgo Wheat: $4.40 – $4.70
Dec KC Wheat: $4.40 – $4.65
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