Wheat Commentary
Dec Chgo Wheat closes 1 ¼ cents higher ($4.38), March 1 cent higher ($4.56) and July½ cent higher ($4.82)
Dec KC Wheat closes ½ cent higher ($4.34), March¼ cent higher ($4.51 ¾) and July ½ cent higher ($4.84)
Monday night, Tuesday morning we saw minor tests of Monday’s upside reversal and the flat price managed to stand in. Gains on the day were minimal but it does appear that we have uncovered some willing short covering below the market. I will concede that most of the buying I saw appeared to be inter-market spread related, not so much outright buying. The problem continues to be the US’s inability to compete in the global market place. Unless we see something new out there in regards to better demand US wheat futures we be relegated to trading range type action for some time to come; similar to what we saw from last fall to this spring.
Interior cash wheat markets for SRW remain quiet. Goodland, KS has been at $1.02 under the Dec dating back to Sept 11th; today it was quoted 15 cents better. SRW at the Gulf saw a minor blip higher while HRW at the Gulf eases a bit from its recent uptick. The flat price short covering is keeping Chgo spreads with a fractional better bias. KC spreads are trying to show some signs of improvement but it is coming in fractional increments.
Any further buying/short covering will have to come from technical considerations. Immediate trendline resistance was taken out yesterday and challenged today. With that said momentum indicators are clearing turning higher. If what I’m seeing is for real any challenges of $4.30-$4.28 (Dec Chgo) should be well received ($4.26-$4.24 Dec KC).
Daily Support & Resistance for 10/25
Dec Chgo Wheat: $4.31 – $4.44
Dec KC Wheat: $4.27 – $4.40
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.