Wheat Commentary
March Chgo Wheat closes 4 ¼ cents lower ($4.21 ½), July 4 cents lower ($4.48) and Dec 4 ¼ cents lower ($4.82 ½)
March KC Wheat closes 5 ¼ cents lower ($4.23 ¼), July 5 ¼ cents lower ($4.54 ¼) and Dec 4 ¾ cents lower ($4.92)
The recent attempt to flag higher off of the Jan 12th-16th break appears to be rolling over. The only news out there is basically the lack of news. Domestic demand for US wheat is nothing to write home about and the US export market is in that same camp. I am a bit surprised that the ongoing weakness in the US Dollar has not provided better looking support. I guess the trade wants to see the better business in response to the lower Dollar before they believe it will happen. I do believe the condition of HRW crop and the ongoing dryness in the central southern US Plains will offer support longer term. In the near term, however, the recent price action speaks for itself; where going nowhere fast.
US cash wheat markets remain quiet – both domestically and for export. Chgo spreads ran steady to fractionally easier as did KC spreads. Both the spreads and the cash markets suggest we’re going nowhere fast.
After Tuesday’s price action one may think contract lows are once again back in the spotlight again. I can’t disagree as the price action leaves a lot to be desired. What I do think is that a challenge of contract lows or new contract lows may be a short term buying opportunity as I have a hard time thinking we’re going to trash this market prior to having a better idea on the success or failure of the wintering crop; not only in this country but abroad as well.
Daily Support & Resistance for 01/24
March Chgo Wheat: $4.17 – $4.26
March KC Wheat: $4.20 – $4.28
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.