Wheat Commentary
March Chgo Wheat closes 2 cents lower ($4.34), July 1 ½ cents lower ($4.59 ¼) and Dec ¼ cent lower ($4.90)
March KC Wheat closes 1 ¼ cents lower ($4.39 ¾), July 1 cent lower ($4.69) and Dec 1 cent lower ($5.04 ¼)
Weekly Wheat Export Sales – old crop 225-500 K T. expected – new crop none expected
Chgo and KC wheat markets move into a minor consolidation mode after interim levels of resistance. I did see some inter-market spreading as Mpls saw some modest gains. The Mpls market had been a bit of laggard while the KC and Chgo market had been rallying. The trade will continue to talk about the possibility of winter kill after the recent cold temps in the central and southern Plains but that won’t be borne out until later this spring. On the 12th the USDA will us their first look at winter wheat seedings. If you recall back on Dec 15th Informa suggested winter wheat acreage could decline by 1.6 million acres. The idea of poor wintering conditions coupled with lower seeded acres should keep this market relatively well supported going into Jan 12th. I’m not expecting much of change to the old crop supply-demand.
Interior cash wheat markets continue to show a bias for higher prices; mostly from the millers whether it is for SRW or HRW. Gulf bids for SRW have seen a minor bump higher but it’s all about slow movement not market making demand. Gulf prices for HRW are easing a touch in response to the rally in the futures’ price. Both Chgo and KC spreads eased fractionally with the consolidating flat price trade.
Despite the lack of upside follow through on Thursday I have to think this market will remain well supported on attempts to sell off prior to Jan 12th. As I mentioned yesterday the mid-low $4.20’s should be decent support for March Chgo wheat while the mid-high $4.20’s should act as decent support for March KC wheat.
Daily Support & Resistance for 01/05
March Chgo Wheat: $4.28 – $4.40
March KC Wheat: $4.33 – $4.45
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.