Wheat Commentary
May Chgo Wheat closes 9 cents higher ($4.64 ¾), July 8 ¼ cents higher ($4.81 ¼) and Dec 8 cents higher ($5.20 ¼)
May KC Wheat closes 12 ½ cents higher ($4.98 ½), July 12 ¼ cents higher ($5.16 ½) and Dec 10¾ cents higher ($5.57)
Weekly Wheat Export Sales – 109.0 K T. old crop vs. 200-500 K T. expected – 200.2 K T. new crop vs. 50-200 K T. expected
We have a new leader in the clubhouse – Mpls wheat!! July Mpls wheat was up 14 cents today vs. 12 cents in KC and 8 cents in Chgo. I have to think the trade is looking at the recent weather and subsequent forecasts for the Dakotas and Minnesota and realizing we may lose some spring acres. KC still is dealing with the drought conditions in the southwestern Plains and Chgo goes along for the ride. As long as the weather stays challenging the bias will be for higher prices (despite the- lack of demand). For what it is worth the latest 8-14 day forecast from the NWS suggests some better potential for moisture in the Kansas Oklahoma area; appears to favor the eastern area not the drier western areas.
US cash wheat prices continue to be relatively quiet. Toledo continues to show the best bid out there; they’re looking for quality SRW. Oklahoma bids are easing suggesting maybe they have a better wheat crop vs. the recent USDA ratings. Export markets are quiet as evidenced by the feeble looking old crop sales. Despite all of this KC spreads showed improvement while Chgo saw an improvement in the May spreads but mostly unchanged July forward. Don’t forget Index fund rolling starts tomorrow so the nearby wheat spreads may see some erratic price action.
In the wee hours of Wednesday morning flat price wheat traded with the rest of the Ag complex; sharply lower from its highs. Flat price wheat, however, was the first market to reject its early morning lows and actually finished marginally higher. Thursday’s trade took its cue from that price action and moved higher. July KC wheat closed above a breakdown gap that occurred on March 19th. This is nothing but positive price action. If July Chgo wheat can eclipse the $4.85 level I see little to stop the advance prior to $5.00
Daily Support & Resistance for 04/06
July Chgo Wheat: $4.70 – $4.85 (?)
July KC Wheat: $5.05 – $5.24 ($5.30)
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