Wheat Commentary
March Chgo Wheat closes 2 ¼ cents lower ($4.24 ½), May 2 ½ cents lower ($4.38 ½) and July 2½ cents lower ($4.53 ½)
March KC Wheat closes 4 cents lower ($4.37 ¾), May 4 cents lower ($4.49 ¾) and July 4 cents lower ($4.61 ½)
Weekly Wheat Export Sales – old crop vs. 200-400 K T. expected – new crop vs. 0-75 K T. expected
Egypt announces an overnight tender for optional origin wheat – in recent tenders US offers have been absent – will the recent slide in the US Dollar make US origin a bit more competitive?
After spending Tuesday nite in the negative column Wednesday’s early trade gave us an attempt at rallying but failed almost faster that its attempt to rally. That in itself is bearish. New news for US wheat remains scant. This too is a bearish factor. The price action of late leaves a lot to be desired. It almost appears that the US wheat futures have gone back to being the bear side of most inter-market spreads.
The interior basis remains quiet for both SRW and HRW. The trend, however, is steady better mostly from slow movement. Chgo spreads firmed ever so slightly. It has to be noted that the SRW basis at the Gulf had a noticeable jump (+10 cents). The export basis for HRW runs unchanged while holding on to recent gains. KC spreads continue to be quiet.
As much as I would like to believe that US wheat futures have made long term lows the shorter term look suggests continued retracement of the rally that started in late December. Given where the shorter term inter-indicators currently stand any substantial losses (down 5-6 cents) on Thursday, I think, represent some low risk buying opportunities. We have to remember that it is these short term indicators that have given us the best short term trading signals.
Daily Support & Resistance for 01/26
March Chgo Wheat: $4.20 – $4.34
March KC Wheat: $4.34 – $4.50
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.