Wheat Commentary
July Chgo Wheat closed 14 ¼ cents higher ($5.21 ½), Sept 14 cents higher ($5.38 ½) & Dec 13 cents higher ($5.59 ¾)
July KC Wheat closed 14 cents higher ($5.40 ½), Sept 14 cents higher ($5.59 ¼) & Dec 13 cents higher ($5.84 ½)
Flat price wheat recoups Monday’s losses and then some. The rhetoric for the support continues to the dry areas of the US HRW belt as well as other global locations that are in less than desirable conditions. I will offer that I don’t believe the competitors’ crop conditions are not as dire as the price action is making it out to be. The trade wants to be long the KC market and that in turn takes the Chgo market with it. I’m told European futures’ markets are at 10 month highs. Chgo is all about speculative short covering while in the KC market its about new spec longs.
Interior cash wheat markets remain as do US export markets. Nearby spreads had a bearish look after Monday’s down day and now spreads have a bit of a bullish look after today’s higher prices. In other words the direction of the flat price dictates the direction of the nearby spreads.
Recent activity shows a great example of what happens when one chases short term extremes – you get it stuffed. Then again fading short term extremes offer great short term trading opportunities. To date it’s the shorter term inter-day charts that give us the best indicators as to when to buy and when to sell. I’ll continue to focus on those charts for the shorter term trading opportunities.
Daily Support & Resistance for 05/23
July Chgo Wheat: $5.10 – $5.30
July KC Wheat: $5.30 – $5.49
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.