Wheat Commentary
Dec Chgo Wheat closes 3 ½ cents lower ($4.27 ¼), March 3 ½ cents lower ($4.44 ¾) and July 3 ¼ cents lower ($4.71)
Dec KC Wheat closes 3 ½ cents lower ($4.26 ½), March 3 ¼ cents lower ($4.43 ¾) and July 3 ½ cents lower ($4.74)
Egypt announces an overnight optional tender for wheat
Tuesday’s losses reversed Monday’s gains. Lower Black Sea prices (Russian origin) were mostly responsible. As far as the USDA Supply-Demand update is concerned few if any material changes are expected. The best support this market has going for it is the amount of speculative shorts. What will prompt the spec shorts to continue to cover remains to be seen. Prices remain within shouting distance of recently established contract lows. At this point in time we should probably not look past the development of a trading affair similar to what we are currently seeing the corn market.
Interior cash wheat markets continue to be quiet. The export market for SRW appears to be easing from recent firming action. Export prices for HRW continue to be strong. Today was the first day of the big boy index fund roll; I saw little that suggested their presence as spreads in both Chgo and KC saw barely fractional changes.
The $64 K question – will last week’s contract lows hold after the USDA report on Thursday? The price action that led to recent contract lows we have seen before and all that ensued was a short lived knee-jerk rally. The strength in the US dollar continues to be a major stumbling block to a better export program. Don’t expect too much one way of the other between now and Thursday midday.
Daily Support & Resistance for 11/08
Dec Chgo Wheat: $4.22 – $4.34
Dec KC Wheat: $4.20 – $4.36
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.