Wheat Commentary
July Chgo Wheat closed 9 ½ cents higher ($5.31), Sept 9 ¼ cents higher ($5.47 ¾) & Dec 8 ½ cents higher ($5.68 ¼)
July KC Wheat closed 11 ¼ cents higher ($5.51 ¾), Sept 11 cents higher ($5.70 ¼) & Dec 10 ¾ cents higher ($5.95 ¼)
Weekly Wheat Export Sales – old crop vs. – 100+100 K T. expected – new crop vs. 100-400 K T. expected
After trading two-sided Tuesday night and early during the day session flat price wheat moved solidly higher for the day. European wheat prices continue to be firm supported by a weaker Euro. I’m told that the western European wheat crop is in decent shape. The trade continues to tout problems in Russia that range from too dry to too wet. Adding to this is the ongoing concern over the US HRW crop due to the dryness in the southwestern US Plains. Funds continue to get longer KC and if I had to guess are now a minor long in Chgo.
Cash markets continue to be quiet as most producers are willing to wait to sell anything until they have a better handle on yield especially for the HRW crop. Spreads show a modest bullish bias as fund buying in the front end supports the spreads.
So – how long are the funds willing to get? I think it’s an almost foregone conclusion that prices will test the interim highs we saw earlier this month. Will the rally stop there? The next question – does July KC have enough fire power to test the $6.00 level? As for the July Chgo contract that would equate to something closer to the $5.80 level. Daily momentum indicators clearly read higher. the flip-flop we saw in the price action Tuesday night and again early in the Wednesday trade followed by new highs for the week old interim rally suggest much higher price potential. I’m not willing to stand in front of it – how about you?
Daily Support & Resistance for 05/24
July Chgo Wheat: $5.20 – $5.40 (?)
July KC Wheat: $5.42 – $5.64
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