Wheat Commentary
May Chgo Wheat closes 5 ½ cents lower ($4.80 3/4), July 9 ½ cents lower ($4.89 ½) and Dec 8 ¾ cents lower ($5.29 ½)
May KC Wheat closes 5 ¼ cents lower ($5.01 ¾), July 5 ½ cents lower ($5.21) and Dec 5 ¾ cents lower ($5.63 ¼)
Weekly Wheat Export Sales – 297.2 K T. old crop vs. -100+250 K T. expected – 280.7 K T. new crop vs. 150-350 K T. expected
Monday, April 30th, is 1st Notice Day for Wheat Deliveries (Chgo, KC & Mpls)
Flat price wheat went into a corrective phase given the recent short term overbought scenario. I did not see anything that changed vs. what the trade had been talking about in recent days. I think most realize that for the near term the dryness issue in a good part of the HRW belt has been alleviated. I think its coming down to how much yield has been lost to freeze damage and right now that’s a bit of an unknown. Weekly export sales were deemed as “okay” vs. expectations. The latest forecasts for Eastern Europe and Russia still feature colder than normal temps who in turn are slowing winter wheat maturity as well as spring planting. Going forward I think we are going to have to get used to the recent volatility.
Interior cash wheat market cash wheat markets don’t show a whole lot. If I had to pin down a direction I would have to say steady to better. The export markets remain quiet. May Chgo wheat is moving into a world of its known as deliveries are expected to be slight if any at all. July forward spreads in Chgo ran steady to a shade easier but are trying to suggest that maybe the worst (widest) may be behind us. KC spreads steadyish upfront while the longer term spreads are holding onto recent gains. If you think wheat prices are going higher longer term KC spreads (intra-market and/or inter-market) may be an alternative to the volatile flat price. Get used to the flat price volatility. Just in the month of April July Chgo wheat has had a 50 cent range and nearly that entire range has been traded twice and Chgo is playing 2nd fiddle to the KC market. If one looks at the July KC market’s March range we have seen a succession of higher lows and lower highs – its called triangulation and it suggests a big move once this formation is violated. Am I crazy to think it will be to the upside?
Daily Support & Resistance for 04/27
July Chgo Wheat: $4.82 – $5.02
July KC Wheat: $5.15 – $5.35
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