Wheat Commentary
July Chgo Wheat closed 6 ½ cents lower ($5.36 1/2), Sept 6 ¼ cents lower ($5.53 ½) & Dec 6½ cents lower ($5.72)
July KC Wheat closed 7 ½ cents lower ($5.56 ½), Sept 8 cents lower ($5.74 ½) & Dec 8 ½ cents lower ($5.97 ¾)
Weekly Wheat Export Inspections – 431.2 K T. vs. 250-500 K T. expected
Weekly Winter Wheat Ratings & Progress – 38% GE (+2%) vs. 36% expected vs. 50% year ago – Headed – 73% vs. 75% 5-year average
Weekly Spring Wheat Progress – 91% planted vs. 91% expected vs. 89% 5-year average – Emerged – 63% vs. 68% 5-year average
On Monday night flat price wheat takes it cue from higher European prices. The primary concerns continue to be the dry areas of the US southwestern Plains (despite decent rains over the weekend) and areas in Ukraine and the Black Sea. Realize that the Black Sea wheat crop has been the market to the world for the past 3 years so this year’s threat to their wheat crop has created the concern. Wheat prices were the last to breakdown on Tuesday as selling elsewhere within the Ag complex appeared to be just too much to overcome. The end result was another interim downside reversal that involved new highs for the move.
Not much happens with the interior cash wheat market. Export prices for SRW are fully steady while bids for Texas Gulf HRW are noticeably stronger. Chgo wheat spreads ran mostly steady on the day despite the flat price selling. KC spreads had a firm bias all the way out to July ’19. I have to think KC spreads took their cue from the stronger Texas Gulf prices.
So here we have another interim reversal to the downside. If this reversal is going to be like previous suggested reversals the break will not be as severe (as low) as the previous correction. Crop developments/conditions in Ukraine and the Black Sea area will continue to dominate the day-to-day discussions.
Daily Support & Resistance for 05/30
July Chgo Wheat: $5.25 – $5.45
July KC Wheat: $5.45 – $5.68
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.