Wheat Commentary
Dec Chgo Wheat closes 6 ¼ cents lower ($4.16 ½), March 7 cents lower ($4.36) and July 7 cents lower ($4.63 ¾)
Dec KC Wheat closes 5 ¼ cents lower ($4.21 ¾), March 5¼ cents lower ($4.34 ½) and July 6 cents lower ($4.66 ¼)
USDA announces 100 K T. HRW sold to Iraq
So much for month-end spec fund short covering as both the Chgo and KC wheat markets registered new contract lows and new contract low closes. I have to admit the spec funds did an excellent job of dressing up their short positions for month end. As I mentioned in the corn comment there have been times in the past when a market finishes month end on an extreme the first of the month can bring about some reversing of that trend. The bottomline for the US wheat markets is that export demand is slack at best and the rest of the World has wheat for sale cheaper than the US can offer.
Interior wheat basis levels are either steady or trying to improve. Export values for HRW continue to be firm; not so much from demand but from a lack of movement to the Gulf. Not much happens with SRW at the Gulf. Chgo spreads saw Dec gaining on March while little happens with the March forward spreads. KC spreads within the current crop year ran flat on the day while old crop improves vs. the new crop.
So what’s friendly about new contract lows and new contract low closes? Inter-day technical indicators read low while daily technical data does not. Last year at this time we saw a similar weekly drift lower that lasted into early December. Is this year more of the same? Longer term monthly charts clearly read sideways to lower.
Daily Support & Resistance for 11/01
Dec Chgo Wheat: ??? – $4.27
Dec KC Wheat: ??? – $4.24
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