Wheat Commentary
March Chgo Wheat closes 1 ¾ cents higher ($4.94 ¾), July 2 ¼ cents lower ($5.15 ¼) and Dec 3 ¼ cents higher ($5.52)
March KC Wheat closes 1 ¼ cents lower ($5.19 ¾), July 1 cent lower ($5.50) and Dec ½ cent lower ($5.85)
Weekly Wheat Export Sales – old crop vs. 200-500 K T. expected – new crop vs. 0-100 K T. expected
Highlights of USDA Supply-Demand – US – Increases carryout by 25 million bu. (lowers export by 25 million bu. – World – Leaves carryin virtually unchanged; raises carryout by 2.79 M T. due to reduction in total usage
Considering World projected carryout at record levels US wheat futures put in a very admirable performance; Chgo wheat with minor advances and KC with minor losses. Then again we have not been trading old crop fundamentals as they have been bearish all along. The trade’s focus is all about the conditions in the central southern US Plains; the heart of the HRW belt.
For the most part interior cash markets remain quiet. SRW at the Gulf develops a minor improvement while HRW at the Gulf is just steady. Bear spreads work at Both Chgo and KC. The rally has been in response to new crop fears; nothing to do with the old crop.
Flat price wheat flirted with sell signal territory and could not follow through. Yes, old crop is bearish – is it so bearish we can handle a short new crop? The competitions’ winter wheat appears to be in fine shape. Take out today’s lows on a closing basis I’ll say the party is over for now. Check out the 8-14 day forecast for Kansas – if that forecast represents a pattern change it comes at the right time.
Daily Support & Resistance for 03/09
May Chgo Wheat: $4.90 ($4.84) – $5.07
May KC Wheat: $5.26 ($5.18) – $5.42
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.