Wheat Commentary
Dec Chgo Wheat closes 3 ½ cents lower ($4.44 ¾), March 3 ¼ cents lower ($4.63 ¼) and July 1 ¾ cents lower ($4.89)
Dec KC Wheat closes 3 ½ cents lower ($4.39 ¼), March 3½ cents lower ($4.56 ¾) and July 3 cents lower ($4.87 ¾)
Weekly Wheat Export Inspections – 691.9 K T. vs. 325-550 K T. expected
Egypt announces an overnight tender for optional origin wheat
Winter Wheat crop Progress – 36% Planted vs. 38% expected vs. 43% 5-year average – Emerged – 12% vs. 16% 5-year average
Friday’s higher than expected quarterly stocks figure along with the higher than expected wheat production figure keeps US wheat futures under pressure. It should be noted that prices were able to bounce off of the day’s lows that were recorded relatively early in the Monday session. The Mpls contract was clearly the downside leader as it was its crop size update (higher vs. expected lower) that set the wheels in motion for the sell-off.
Interior cash wheat markets, SRW in particular, are showing some strength. Not much is happening with the interior HRW market. Despite the strength in the interior SRW market its respective export market remains quiet. The export market for HRW continues to see new strength. Chgo spreads ran softer on the day while KC spreads ran unchanged within the current crop year while losing fractionally to the new crop.
Despite what appears to be a hard break from last week’s interim highs both the KC and Chgo markets remain “channel” bound. The KC took out its channel line support but did not stay below it for very long. For as ugly as the Mpls market looked there was a technical bright side to it on Monday. The upside breakout gap that occurred on June 12th-13th was filled on Monday and prices were able to close above that level. I’m not sure US prices are going anywhere of substance any time soon as we remain a follower of global prices – if they firm, we firm – if they sag we sag.
Daily Support & Resistance for 10/03
Dec Chgo Wheat: $4.40 – $4.52
Dec KC Wheat: $4.34 – $4.48
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.