Wheat Commentary
July Chgo Wheat closed 18 cents lower ($5.05 ¼), Sept 18 cents lower ($5.22 ¾) & Dec 16 ¾ cents lower ($5.45)
July KC Wheat closed 19 ¼ cents lower ($5.21 ½), Sept 18 ½ cents lower ($5.40 ½) & Dec 18 ¾ cents lower ($5.64 ½)
Weekly Wheat Export Inspections – 341.4 K T. vs. 400-600 K T. expected
Weekly Winter Wheat Rating & Progress – 37% GE (-1%) vs. 38% expected – Harvested – 5% vs. 8% expected vs. 4% 5-year average
Weekly Spring Wheat Rating & Progress – 70% GE vs. 71% expected – Planted – 97% vs. 96% expected – Emerged – 81% vs. 82% 5-year average
The trade wants to talk about US Harvest pressure when harvest has barely started (I saw locations in Oklahoma actually bidding up for wheat). European wheat prices ran lower on the day. Russian wheat prices were not higher despite little relief from their ongoing dryness in the south and too wet in the north. All this worked together to slam US wheat futures. It seemed all of the speculative sectors were racing one another to liquidate.
Interior SRW cash wheat remains quiet as does its export market. Chgo spreads had a bearish bias due to the spec liquidation. I see no changes in the Kansas HRW cash bids while Oklahoma seems to be a bit better. HRW at the Gulf is maintaining recent easiness. KC spreads also showed a bearish bias due to the flat price selling.
All I can say is that wheat futures were a giant trap one week ago when the market move d into new highs for the move and then failed. They have been failing ever since. The hero in me would like to say there is no more than 10 cents left to the current break. Daily technical data suggests additional time and space to move lower while shorter term inter-day data suggests we are in line for some bouncing. I know I sure can’t sell current levels but so far the price action is lacking for ownership. The hero/spec in me would come after another day of double digit losses just playing the short term oversold.
Daily Support & Resistance for 06/05
July Chgo Wheat: $4.99 – $5.15
July KC Wheat: $5.15 – $5.32
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.