Wheat Commentary
March Chgo Wheat closes 2 ½ cents higher ($4.27), May 2 cents higher ($4.40 ½) and July 1 ½ cents higher ($4.55)
March KC Wheat closes 2 ½ cents higher ($4.40 ¼), May 2 ¾ cents higher ($4.52 ½) and July 3 cents higher ($4.64 ½)
Weekly Wheat Export Sales – 853.4 K T. old crop vs. 200-400 K T. expected – 103.9 K T. new crop vs. 0-75 K T. expected
Overnight Egypt buys 410 K T. Russian wheat – one load of US HRW was offered; it was the highest of 13 other offers
Weekly wheat export sales were the best we have seen so far this season. The sales break down was 316 K T. HRW, 209 K T. HRS, 286 K T. white and just 41 K T. of SRW. Needless to say this sales data gave the flat price a nice rally early in the session. As the session wore on strength in the US dollar had prices easing to lower on the day. Late short covering firmed prices to the plus side for the day.
Interior cash wheat basis remains quiet with no one pushing the basis one way of the other. The export basis for HRW eases while the export basis for SRW continues to firm. This is a bit surprising given the breakdown of the recent export sales report. Chgo spreads continue to show improvement (albeit just fractionally) while KC spreads continue to a snoozer.
Chgo wheat honors interim support that was established last week and registers a “minor” interim reversal (outside day closing higher) to the upside. Despite this daily momentum indicators still suggest lower prices. KC prices saw new lows for the current drift lower but managed to finish higher on the day (it was not an outside day). I still want to believe wheat prices have scored long term lows but the market is telling me that “long term” hasn’t started yet. My bias for the near term is to use shorter term inter-day technical indicators for points to buy.
Daily Support & Resistance for 01/27
March Chgo Wheat: $4.20 – $4.34
March KC Wheat: $4.34 – $4.50
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