Wheat Commentary
March Chgo Wheat closes 4 ¼ cents lower ($4.85 ½), July 3 cents lower ($5.15 ¼) and Dec 2 ¾ cents lower ($5.41)
March KC Wheat closes 2 cents lower ($5.07), July 1¾ cents lower ($5.37 ¼) and Dec 1 ½ cents lower ($5.73 ½)
On Friday and 1st half Monday we traded the increases in US and World wheat carryout. Last half Monday and first half today we traded the conditions (dry) in the US central southern Plains. The last half of today’s trade was about forecasts suggesting some decent rainfall for the US central southern Plains. Some forecasters are quick to point out that some of the drier areas (the western reaches of the central southern Plains) may miss out on the forecasted rains. The bottom line is that the trade heeded these forecasts and responded accordingly to the rally that basically tested the sell signal levels that were elected on Friday.
Interior basis levels continue to be quiet with one exception, Toledo. Toledo has been loading out SRW all winter so now it seems supplies are starting to run a bit tight so their basis improves by 5 cents. The Gulf basis for HRW appears slack looking while the SRW basis at the Gulf has a slight bump up to it. Chgo wheat spreads ran softer with the flat price selling. The Chgo May/July spread has lost 6 cents over the past two weeks; it currently sits at 18 cents under which are new contract lows. KC spreads are pretty much a trading range affair with the short term direction being softer.
Friday registers an interim sell signal. After a brief period of follow through selling prices rally back to test the sell signal. The sell signal remains intact. As far as I’m concerned the price action looks lower. If the forecasted rains fail to impact the drier areas of the US central southern Plains the anticipated lower price action will be considered a buying opportunity.
Daily Support & Resistance for 03/14
May Chgo Wheat: $4.78 – $4.93
May KC Wheat: $5.11 – $5.28
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.