Wheat Commentary
Dec Chgo Wheat closes 7 ½ cents lower ($4.36), March 6 ¾ cents lower ($4.56) and July 6 ¾ cents lower ($4.83 ¾)
Dec KC Wheat closes 6 cents lower ($4.30 ¾), March 6 cents lower ($4.48 ¾) and July 5 ¾ cents lower ($4.81)
Egypt announces an overnight tender for optional origin wheat – will the US be able to compete considering Egypt mandate for high protein?
It was lower prices from the get go on Sunday night. Trade guesstimates have the US wheat carryout increasing due to the higher Sept quarterly stocks. That, in turn, has the spec trade selling flat price wheat as well as on inter-market spreads. The lack of global demand for US wheat remains this market’s biggest problem.
US cash wheat prices are quiet in the interior as well as at the Gulf. Gulf prices for HRW continue to show a firm bias but that has done little to generate any futures’ spreading enthusiasm. It was just one week ago Chgo spreads were on the verge of some bullish performance – today’s bear spreading is registering an interim sell signal of that rally. KC spreads remain pretty much dead in the water.
Prior to last week the KC wheat market had been a very distinct upwards channel – it broke down last week. The Chgo wheat market maintained its upwards channel until today – it broke down today. The bottom line is wheat charts are barely short of ugly looking again. Given the recent price performance the only hope this market has is that recent lows will hold and will develop into a trading range affair. Inter-market technical indicators are getting low enough that they suggest we try the long side on further weakness from current levels.
Daily Support & Resistance for 10/10
Dec Chgo Wheat: $4.31 – $4.44
Dec KC Wheat: $4.26 – $4.38
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.