Wheat Commentary
Dec Chgo Wheat closes ½ cent lower ($3.87 ¼), March 2 ¾ cents lower ($4.10 ¾) and July 4 ¼ cents lower ($4.37 ¼)
Dec KC Wheat closes 1 ¼ cents lower ($3.94), March 1 ½ cents lower ($4.11 ¼) and July 1 ¾ cents lower ($4.40 ¾)
Overnight Egypt buys 295.0 K T. of wheat – 235.0 K T. Russian, 60.0 K T. Romanian
USDA announces 120.0 K T. HRW sold to Algeria
USDA US Wheat Projected Carryout 960 million bu. vs. 938 expected vs. 935 last month
USDA World Wheat Projected Carryout 268.42 M T. vs. 267.07 expected vs. 267.53 last month
The initial look at the USDA projected US wheat carryout was bearish reduced exports) as was the World wheat projected carryout. The initial reaction was negative but when recent lows held some short covering ensued. This rally, like the rest of the Ag markets’ attempt to rally, failed miserably. The Chgo wheat market went from 5 cents higher to 3 cents lower; new contract lows with new contract low closes. The KC market wasn’t quite as ugly but it still closed against yesterday’s contract low. The only remaining positive factors that I could find were that Chgo spreads were working higher and KC gaining on Chgo. In the past these two factors have gone along with attempts to rally.
Toledo is bidding for SRW after losing some to recent deliveries. Elsewhere not much is happening with SRW and that includes the Gulf. I have to think the Toledo bidding for cash is buoying the Chgo spreads. Interior bids for HRW are quiet but firm to the millers and the Gulf. This is due to strong elevator holding not a surge in demand. KC spreads saw some minor improvement; not quite as noticeable when compared to Chgo.
Horrible looking flat price action vs. Intra-market spreads trying to improve and inter-market spreads trying to improve. Who wins the battle? It has to be noted that the Russian sale prices to Egypt were not too dissimilar to sales over the past couple of weeks yet US prices have continued to move lower. That would suggest the US is getting closer to being competitive. The “however” is that the flat price actions says we’re not quite there – yet.
Daily Support & Resistance for 12/13
March Chgo Wheat: ??? – $4.20
March KC Wheat: ??? – $4.20
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