Wheat Commentary
May Chgo Wheat closes 1 ¼ cents higher ($4.92), July 2 ½ cents higher ($5.08 ½) and Dec 3 ¾ cents higher ($5.48 ½)
May KC Wheat closes 1 cent lower ($5.21 ¾), July 1 ¼ cents lower ($5.40 ½) and Dec ¼ cent higher ($5.83)
Highlights of the USDA Supply-Demand Report – US – cut feed usage by 30 million bu. – increased carryout by 30 million bu. – World – increased carryin by 2.0 M T. – Increased Global production by 940 K T. – increased total usage by 630 K T. – increased carryout 2.33 M T.
Overnight flat price wheat corrects to the downside stemming from ideas of a short term overbought. The day session has the flat price marching right back up. A bearishly construed USDA supply-demand report has the flat price selling off again only to come right back up. Minor profit taking late in the day gave us mixed closes. I couldn’t help but notice KC exhibiting a bit of hesitancy to move higher meaning new highs for the current rally. Mpls tried to extend its gains but it too slipped late. It was the “hard varieties that saw the increase in the carryout. Chgo, however, managed to hold onto a good part of its intra-day rally. Are the spec longs in KC and Mpls starting to get a bit “gunny” given the lack of demand? Chgo is still all about short covering but I get a bit skeptical when the markets that should be leading are not.
Not much happens with the interior cash wheat markets. Export markets for wheat are quiet as well. Bear spreads were working in Chgo suggesting some bear spreading from the index fund rolling. KC spreads ran fractionally mixed on the day.
I would like to think the flat price action is showing signs that it has gone high enough for now. The dry areas of the southwestern Plains have a slight chance at some moisture late this week. The 8-14 day from the NWS talks about better chances for moisture as well. My bias is to see some backing and filling of the recent rally over the next few days.
Daily Support & Resistance for 04/11
July Chgo Wheat: $4.97 ($4.94) – $5.15
July KC Wheat: $5.30 ($5.25) – $5.50
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