Wheat Commentary
Dec Chgo Wheat closes 2 ¼ cents higher ($4.29), March 1 ¼ cents higher ($4.45) and July½ cent lower ($4.69)
Dec KC Wheat closes 1 ½ cents higher ($4.29), March 1 cent higher ($4.46) and July ½ cent lower ($4.73 ½)
Weekly Wheat Export Sales – 781.8 K T. old crop vs. 350-550 K T. expected – no new crop vs. none expected
The USDA increases US exports by 25 million bu. which leads to a like reduction in the carryout. The World projected carryout declines 600 K T. This led to steady better US futures’ prices.
A slightly friendly USDA report allows wheat prices to stand in. Weekly export sales ran better than expected which helped the cause. The large amount of spec shorts also lent support given the fact that the USDA gave them nothing to support their short positions. For the longest time low wheat prices had been weighing on the corn market. Now I have to wonder if low corn prices will weigh on the wheat market.
Interior cash wheat prices remain quiet with no changes being reported. Gulf prices for SRW remain nothing to write home about while HRW prices at the Gulf remain strong. Bull spreads continue to work amongst all of the varieties. We’ve talked about the futures’ market being in the midst of the index fund roll and it not having any impact at all on the nearby spreads. It makes me wonder if the spec short position is so great it is offsetting the index funds rolling forward their passive long positions.
The price action is still trying to suggest lows have been established while lacking confirmation. I need to see closes above Monday’s highs to confirm. Prices did trade above Monday’s high but did not close above it. The bull spreads are strongly hinting at the possibility that lows are in place.
Daily Support & Resistance for 11/10
Dec Chgo Wheat: $4.24 – $4.40
Dec KC Wheat: $4.24 – $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.