Wheat Commentary
May Chgo Wheat closes ½ cent higher ($4.53 ½), July½ cent higher ($4.69 ¼) and Dec ¾ cent higher ($5.07 ¼)
May KC Wheat closes 4 ½ cents lower ($4.65 ½), July 4 cents lower ($4.83 ¾) and Dec 3 ½ cents lower ($5.24 ½)
Weekly Wheat Export Sales – old crop vs. 100-300 K T. expected – new crop vs. 50-200 K T. expected
Continued long speculator liquidation dominated the KC wheat market up until the noon hour on Wednesday. At one point KC wheat was down nearly 12 cents. This had Chgo easing as well but to a much lesser extent (down 6-7 cents max) as inter-market spreading (the liquidation of long KC/short Chgo) offered Chgo some left-handed support. Shortly after the noon hour KC started to realize some support for both the flat price and the inter-market spread. The liquidation continues to be all about the possibility of a pattern change for the central southern US Plains. Forecasts from the NWS continue to suggest better possibilities for moisture. They don’t appear to be drought breakers but at this point in time any moisture is welcome.
Interior cash wheat bids remain quiet. Toledo still has the best bid for SRW. It has been weeks since I’ve seen and changes for interior HRW. Last night’s export posting for SRW saw a slight bump higher. The Gulf bid for HRW remains on the defensive. Chgo spreads ran mixed on the day with only fractional changes until one got out to July 2019; July 2019 forward was noticeably stronger. KC spreads continue to be a non-event while staying wide.
Given today’s bounce off of the day’s lows I would like to say wheat prices have gone low enough for now. The mid-high $4.40’s (May Chgo) was taking off point (rally started) back in late January; today’s low was $4.46 ¾. That same level for May KC wheat was the mid-high $4.50’s; today’s low was $4.58 ¼. If I’m right in this regard 15-20 cent rallies are not out of the realm of possibility over the next number of days.
Daily Support & Resistance for 03/22
May Chgo Wheat: $4.50 – $4.62
May KC Wheat: $4.60 – $4.81
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