Wheat Commentary
July Chgo Wheat closed 4 ¼ cents higher ($5.26 ¼), Sept 4 cents higher ($5.43) & Dec 4 ½ cents higher ($5.62 ¾)
July KC Wheat closed 1 ¾ cents higher ($5.42 ½), Sept 1 ½ cents higher ($5.60 ¾) & Dec 1 ¼ cents higher ($5.84 ½)
Weekly Wheat Export Sales – old crop vs. -100+100 K T. expected – new crop vs. 150-450 K T. expected
Flat price wheat tries to correct from its near 40 cent break as Chgo prices finish 10 cents off of the Wednesday night lows and KC 9 cents off of its Wednesday night lows. The story here has not changed. The trade still has concerns about yields in the US southwestern Plains and conditions in Russia. Russia still shows a dry bias for it its winter wheat crop and a wet bias for it spring wheat crop. Earlier today we saw Ukraine lower its winter crop by 1.5 M T. while still suggesting they will have a decent total crop for 2018. It was a bit disturbing to me that Chgo led the price gains over KC but then again it’s the KC market that has the greatest concentration of spec longs.
Interior cash SRW prices remain quiet. SRW for export inches up 1-2 cents over the past 5 days. Chgo spreads were fractionally mixed upfront while the 3 upfront contracts lose to the deferred. Interior HRW are showing a firm tone in Oklahoma, unchanged in Kansas. Export prices for HRW continue to be firm; up 9-10 cents vs. early last week. KC spreads ran mostly steady on the day with a slight short term higher bias.
Despite today’s modestly higher closes Tuesday’s suggested reversal remains very much intact. If we are indeed entering a corrective type mode similar to what we have seen this spring prices should maintain this mode for maybe another 1 ½ weeks. Reminder; due to the increase in volatility here get used to sharp short term stabbing moves that will occur in either direction with a faltering ability to sustain that move.
Daily Support & Resistance for 06/01
July Chgo Wheat: $5.15 ($5.10) – $5.34
July KC Wheat: $5.32 ($5.28) – $5.54
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