Wheat Commentary
July Chgo Wheat closed 4 ¾ cents higher ($5.10), Sept 4 ¾ cents higher ($5.27 ½) & Dec 4 ½ cents higher ($5.49 ½)
July KC Wheat closed 7 ½ cents higher ($5.29), Sept 7 ¾ cents higher ($5.48 ¼) & Dec 7 cents higher ($5.71 ½)
Flat price wheat comes roaring back after Monday’s bashing. Unfortunately the “roar” did not last through the close. At the end of the day Chgo prices favored the low side of the day’s range while KC prices were pretty much in the middle of the day’s range. Harvest in under way in Oklahoma – protein is good but the bpa not so much. There are still concerns as to the developing Russian winter crop due to dryness and excessive moisture in their spring wheat areas. To date I’ve only seen one estimate dealing with a smaller crop and it wasn’t by that much.
Not much happens with cash SRW prices. HRW cash prices in Oklahoma continue to improve. I can’t tell you the last time I saw Oklahoma cash prices at option going into harvest. KC spreads continue to be pretty much a non-event but if we start seeing Kansas cash prices begin to improve as they move into harvest I can’t help but think the further out bull spreads will begin to revive. Not only the intra-market spreads but the inter-market spreads as well.
Tuesday’s inside day of Monday does not negate the current interim downtrend. So far I’m just viewing Tuesday’s action as a reaction to the severe short term oversold the flat price was showing after Monday’s performance. Daily trend indicators still show a distinct bias to the downside. I could be wrong but it seems the daily fund managers react more to the short term inter-day technical indicators than they do the underlying trend; just my opinion. This type of trading does generate more commissions vs. just sitting on a position.
Daily Support & Resistance for 06/06
July Chgo Wheat: $5.00 – $5.20
July KC Wheat: $5.18 – $5.38
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.