Wheat Commentary
May Chgo Wheat expired 9 cents lower ($4.80 ½), July closed 7 ½ cents lower ($4.91 ¼) and Dec 7 cents lower ($5.30 ¼)
May KC Wheat expired 5 cents lower ($4.396 ¾), July closed 8 ¼ cents lower ($5.09 ¾) and Dec 7¾ cents lower ($5.54 ¼)
Weekly Wheat Export Inspections – 404.1 K T. vs. 250-500 K T. expected
Egypt announces an overnite tender for optional origin wheat
Winter Wheat Ratings & Progress – 36% GE (+2%) vs. 34% expected vs. 51% year ago – Headed – 45% vs. 53% 5-year average
Spring Wheat Progress – 58% planted vs. 52% expected vs. 67% 5-year average – Emerged – 14% vs. 36% 5-year average
Poor demand coupled with beneficial forecasts for the HRW areas of the US keep wheat futures under the gun. Adding to this – our global competitors which have recently had weather issues (either too wet or too dry depending on country) are seeing reversals of these issues according to the latest forecasts. Adding to all of this were the higher than expected output forecasts the USDA gave us last Thursday.
Interior cash wheat prices remain quiet with few if any changes being seen. This holds true for export prices as well. Wheat spreads ran slightly softer in Chgo and mostly steady in KC. Overall Chgo wheat spreads, July/Dec in particular appear to be developing into a trading range for now between 43 cents under and 34 cents under. That same spread in KC appears to be similar in its price action.
Short term indicators coming into today’s trade were reading a fair degree of oversold. The midday bounce attempt pretty much took care of that. Daily technical data reads nowhere near oversold. Last week I thought current levels would provide some technical support. So far the price action is not suggesting that. I would still like to think we are close to realizing some support given the magnitude of the break we have seen over the last 1 ½ weeks. Maybe another sharp break on Tuesday will catch me leaning to buy.
Daily Support & Resistance for 05/15
July Chgo Wheat: $4.85 – $4.98
July KC Wheat: $5.05 – $5.19
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.