Wheat Commentary
March Chgo Wheat closes ¾ cent lower ($4.51), July 1 cent lower ($4.78) and Dec ½ cent lower ($5.10)
March KC Wheat closes ¼ cent lower ($4.67), July ¼ cent higher ($4.97 ¾) and Dec 1 ½ cents higher ($5.32)
Weekly Wheat Export Sales – 289.1 K T. old crop vs. 300-500 K T. expected – no new crop vs. 0-100 K T. expected
Egypt announces an overnight tender for optional origin wheat.
Is the wheat price done with its correction of the recent rally? Chgo prices finish barely lower at or near the day’s high and 8 cents off of its mid-morning low. KC price action was similar. Yes, weekly export sales were barely short of miserable but we have not been trading demand. Concerns over wintering conditions in the central southern US Plains have not been alleviated as forecasts continue dry. Drought Monitor maps have the dry areas in that region increasing. After Tuesday’s rally the price was ripe for a correction and I think we have just seen it. Egypt is in for wheat overnight – it will be interesting to see what prices they are willing to pay since prices are up worldwide.
Toledo continues to reach for wheat. Cash prices elsewhere remain quiet. Chgo spreads regained fractions of recent losses. KC spreads remain dead in the water. KC remains reluctant to give back any of its recent gains over Chgo. I believe that is a “positive” for yet higher prices.
Technical considerations on daily charts continue to suggest caution when trying to chase rallies. Shorter term inter-day technical considerations had been advertising wait for corrections. We have seen those corrections and now these inter-day charts are suggesting higher prices are in the offering. My gut says we may have to deal with some back and forth type trading before resuming higher. Longer term charts, weeklies and monthlies, are suggesting the worst is behind us for some time to come.
Daily Support & Resistance for 02/02
March Chgo Wheat: $4.46 – $4.57
March KC Wheat: $4.62 – $4.73 ($4.77)
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