Wheat Commentary
March Chgo Wheat closes ¼ cent lower ($5.02), July 2 cents lower ($5.21 ¼) and Dec 1 cent lower ($5.54 ¾)
March KC Wheat closes 4 ¼ cents lower ($5.29 ¼), July 3 ½ cents lower ($5.57 ¾) and Dec 3 ¼ cents lower ($5.90 ¾)
Egypt announces an overnight tender for optional origin wheat – don’t expect the US to participate as the recent rally keeps US origin from being competitive – overnight Egypt buys $175 K T. Russian wheat
Flat price wheat gets hit hard Monday night and again early Tuesday but manages to come back with only modest losses on the day. The rationale of the sell-off was selected HRW states’ crop conditions being reported as “stable” vs. last week. We may be stable but crop conditions in the western reaches of the HRW belt still leave a lot to be desired. Forecasts are not suggesting any relief in the near term. Longer term forecasts (8-14 day), however, do suggest the possibility of some better moisture vs. what we have seen in recent weeks.
Both interior and export cash wheat markets remain quiet. Spreads in both Chgo and KC (May forward) showed some weakening. This goes along with the flat price selling we saw. One has to remember that the majority of the day-to-day trade is done all upfront.
Is the price action telling us we have a top in the making? Closes below the recent 2-day lows would go far in suggesting that. We’re in a weather market; not a market that’s fundamentally driven. I doubt the USDA will have anything to say involving old crop that will give us a bullish slant. My guess May Chgo wheat will hang between the $4.90 and $5.20 level for the next 1 ½ days. The same can be said for May KC wheat; hanging between $5.25 and $5.50.
Daily Support & Resistance for 03/07
May Chgo Wheat: $4.95 – $5.18
May KC Wheat: $5.30 – $5.50
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