Wheat Commentary
Dec Chgo Wheat closes ¾ cent lower ($4.35 ¼), March¾ cent lower ($4.55 ¼) and July 1 cent lower ($4.82 ¾)
Dec KC Wheat closes ½ cent higher ($4.31 ¼), March½ cent higher ($4.49 ¼) and July ¾ cent higher ($4.81 ¾)
Egypt announces an overnight tender for optional origin wheat – Egypt buys 170 K T. Russian origin – US wheat was not offered
Weekly Wheat Export Inspections – 350.6 K T. vs. 400-600 K T. expected
Weekly Winter Wheat Progress – 48% planted vs. 49% expected vs. 58% 5-year average – 25% emerged vs. 30% 5-year average
Inter-day technical considerations coupled with recent weakness in the US Dollar prompted some spec short covering early in the day but it went nowhere; not even testing suspected minor resistance. Once again the Egyptian tender featured a lack of US offers. I get the idea that between high freight costs out of the US and the Egyptian requirement for high protein the US just can’t compete. Weekly export inspections remain nothing to write home about. The recent price action is synonymous with “feeble”. The speculative sector remains a healthy short and it appears they are willing to stay that way.
Interior cash wheat markets are quiet as are the US wheat export markets. Chgo spreads have been softening in recent days while KC spreads are flat hovering above recent lows.
The price action leaves a lot to be desired as we have been grinding south for the past 8 days. The only support I see left for the Dec Chgo contract is an interim spike low at $4.28 ¼ from Sept 12th followed by the contract low at $4.22 ½. I have to admit it bothers me the complacency of the spec shorts and their willingness to sit on what seems to be very attempt to rally. For what it is worth – current daily momentum indicators are such that if the trade tries to bury the wheat market after what the USDA may have to say on Thursday the “contrary” in me will be tempted to fade the break.
Daily Support & Resistance for 10/11
Dec Chgo Wheat: $4.30 – $4.44
Dec KC Wheat: $4.26 – $4.39
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