Wheat Commentary
March Chgo Wheat closes 1¾ cents higher ($4.32 ½), May 1 cent higher ($4.43 ½) and July ¾ cent higher ($4.56)
March KC Wheat closes 2 ½ cents higher ($4.42), May 2 ¼ cents higher ($4.54 ¾) and July 2 ½ cents higher ($4.66 ½)
Weekly Wheat Export Sales – old crop vs. 300-500 K T. expected – new crop vs. 25-100 K T. expected
Flat price wheat was the weak sister of the Ag complex on Wednesday but still managed to finish positive on the day thanks to some late short covering. New news involving the US wheat market was slight but with corn and soy prices moving higher wheat prices tagged along for the ride despite what appeared to be inter-market spreading (selling wheat vs. buying corn and soy). Tomorrow’s USDA supply-demand update is expected to show only minimal changes – the US wheat carryout is expected to decline by 6 million bu. and the World carryout is expected to decline by 160 K T.
Interior cash wheat basis levels see little change. Export values improve vs. recent weakening. Nearby Chgo spreads have been improving despite the ongoing index fund roll. My thought there is the world is running short on milling quality wheat and that brings US origin into the spotlight. Prior to yesterday KC spreads have been a major dog – Yesterday saw those spreads score major looking upside reversals. Is the spread improvement in both Chgo and KC the first step to my ideas of long term lows being established?
Flat price wheat charts are still advertising trading range affairs. With the new $$$ flowing into the corn and soy markets can the wheat market be that far behind? I’m not an advocate of chasing rallies but I am still advocating buying breaks to suspected support levels with the idea we are indeed carving out long term lows.
Daily Support & Resistance for 02/09
March Chgo Wheat: $4.20 – $4.42
March KC Wheat: $4.30 – $4.52
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