Wheat Commentary
March Chgo Wheat closes 1 ½ cents higher ($4.34 ½), July 1 ½ cents higher ($4.59 ¾) and Dec 1 ¼ cents higher ($4.93)
March KC Wheat closes 2 cents higher ($4.35), July 2 ¼ cents higher ($4.66 ½) and Dec 2 ½ cents higher ($5.04)
Weekly Wheat Export Sales – old crop 200-500 K T. expected – new crop none expected
How would I describe Thursday’s price action – whipsaw! We started out higher, went lower and came back higher. The weaker US Dollar continues to be the primary supporting issue. It should be noted that right before the grain close the Dollar started to rally viciously; at one time shortly after the grain close 115 pts off of the day’s low (due to Presidential comments). If this reversal type action continues overnight and into Friday’s session it could weigh on the recent attempt to rally. Demand news of note for US Wheat continues to be lacking. The trade will continue to focus on the value of the US dollar as well as the size of the spec short. Dryness in the central southern Plains, as of this writing, should be viewed as a longer term supportive issue.
Not much happens with cash SRW. Cash HRW continues to show a firming tone in Oklahoma (even though it only happens once every two weeks). Not much happens with export prices even though HRW at the gulf has been flip-flopping 10 cents every other day. Spreads in Chgo ran steady upfront while the nearby gained on the deferred. KC spreads continue to fractionally soften. KC is now running pretty much even with Chgo. With that said it suggests to me that whatever flat price rally occurs it is technical in nature, not fundamental.
Flat price challenges suspected resistance, $3.38-$3.40 and gets turned away. I’ll maintain my recent bias that we are more of a trading range affair vs. the idea that a bull market is emerging. Watch $4.43 in March Chgo wheat – weekly closes above that level will have me changing my tune. $4.43 – $4.46 is a similar level for March KC wheat.
Daily Support & Resistance for 01/26
March Chgo Wheat: $4.28 – $4.42
March KC Wheat: $4.28 – $4.42
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