July Chgo Wheat closed 9 ½ cents lower ($4.90), Sept 12 cents lower ($5.01 ½) & Dec 13 cents lower ($5.21 ¼)
July KC Wheat closed 20 ¼ cents lower ($4.99 ½), Sept 19 ¼ cents lower ($5.15) & Dec 19 ¾ cents lower ($5.38 ¼)
Weekly Wheat Export Inspections – 372.8 K T. vs. 300-500 K T. expected
Egypt announces an overnight tender for optional origin wheat
Weekly Winter Wheat Ratings & Progress – 39% GE (+1%) vs. 38% expected vs. 49% year ago – Harvested – 27% vs. 26% expected vs. 19% 5-year average
Weekly Spring Wheat Ratings & Progress – 78% GE (+8%) vs. 70% expected vs. 41% year ago – Headed – 9% vs. 14% year ago vs. 12% 5-year average
The KC HRW futures market leads the US wheat complex lower. Ongoing harvest coupled with long liquidation is the rationale for the lower prices. Chgo losses were not as severe due to inter-market spreading as long KC/short Chgo spreads were being liquidated. I’m also hearing that the Russian winter crop is not as bad as earlier reported. The Russian winter wheat harvest is just getting underway. The other side of that coin is that their spring wheat crop is off to a rough start. The EU continues to downgrade their wheat crop but overall it still appears to be pretty good.
Interior cash wheat bids are seeing little change from last week. SRW bids appear to be nothing to write home about. The “however” is Chgo spreads saw noticeable improvement. HRW bids are still firm but today’s continued liquidation in the KC market had those spreads finishing softer upfront; mixed vs. their deferreds.
It was just a few days ago the KC market was trying to assume a leadership role to the upside – now it has a leadership role to the downside. The 200-day MA for July KC sits about 4 cents below today’s low. The last time that was challenged was back in mid-April. It was violated by just a couple of cents, consolidated for about a week and then rallied 50 cents or so. I don’t see that happening again. The 200-day moving average for July Chgo wheat sits about 7 cents below today’s low. I think it is a given that the 200-day MA’s will get challenged if not taken out. Realize – the wheat market has only been for 4 days so we are nowhere near oversold.
Daily Support & Resistance for 06/19
July Chgo Wheat: $4.85 (?) – $5.05
July KC Wheat: $4.95 – $5.20
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.