Wheat Commentary
May Chgo Wheat closes 17 cents lower ($4.50 ¾), July 17 ¼ cents lower ($4.67 ¾) and Dec 17 cents lower ($5.06 ¼)
May KC Wheat closes 29 ¼ cents lower ($4.70 ¼), July 28½ cents lower ($4.88) and Dec 25 cents lower ($5.28 ½)
Weekly Wheat Export Inspections – 443.2 K T. vs. 275-450 K T. expected
Rain throughout Kansas over the weekend and forecasts for more has the KC wheat market sharply lower – May KC wheat briefly tapped at limit down. There was rain in Oklahoma and central eastern Texas but not as widespread as what seen in Kansas. Adding to the weekend rains are forecasts calling for more. If I didn’t know better we are looking at pattern change for the central southern Plains. Chgo wheat followed sympathetically (less losses) as the unwinding of long KC/short Chgo provided Chgo with some left handed support.
Not much happens with the interior SRW basis other than Toledo still needing wheat. The Gulf for SRW is quiet. Nearby Chgo wheat spreads ran fractionally better while the longer term spreads ran continue to show carry building into the price structure. The interior HRW basis remains quiet while Gulf values for HRW continue to ease. KC spreads ran noticeably easier all the way out. One has to remember the spec in Chgo wheat has maintained a minor short position throughout the recent rally while the spec in KC had gotten blatantly long.
Intra-day charts read oversold. Inter-day charts read oversold. Daily charts do not read oversold. The only “Fibo” number left for May Chgo wheat is the 75% retracement; $4.48 1/2 and that only 2-3 cents lower. The only “Fibo” numbers left of May KC what are the 61.8% retracement ($4.71 ½, fractions below where we closed) and the 75% retracement ($4.55). From a daily chart perspective the $4.55 level seems feasible as the mid-$4.50’s was a breakout level dating back to the 2nd week of January.
Daily Support & Resistance for 03/20
May Chgo Wheat: $4.42 ($4.36) – $4.60
May KC Wheat: $4.63 (?) – $4.85
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