Wheat Commentary
Dec Chgo Wheat expires 6 ½ cents lower ($3.91 ½), March closes ½ cent higher ($4.18) and July 1 cent higher ($4.41)
Dec KC Wheat expires 1 ¼ cents higher ($4.00 ½), March closes 4 ¾ cents higher ($4.20) and July 4 ¼ cents higher ($4.43)
Weekly Wheat Export Sales – old crop vs. 300-500 K T. expected – new crop vs. none expected
We have a new leader in the US wheat futures’ market – it’s the KC contract. Weather fears (winter kill) coupled with a stronger export market for HRW set the stage on Wednesday. The Chgo market was a meek and mild follower. Late last week March KC wheat traded to 4 ½ cents under Chgo; today it traded to 2 ¼ cents over. We have not seen any announced sales from the USDA but the word is that interest in US hard wheat is there.
The interior cash wheat market for SRW remains quiet as does its respective export market. It was last Thursday we saw the interior Oklahoma market show some strength. Today it was the track rail market to the Gulf. Chgo spreads were fractionally softer on Wednesday while the KC spreads were fractionally firmer.
With daily momentum indicators reading higher for wheat will the spec short covering continue despite the extreme last strength in the US Dollar on Wednesday? I’m not wild about the flagging appearance in the March Chgo market. $4.22 on up looks like solid resistance. The best looking resistance for the March KC contract doesn’t come into view until we get into the mid-high $4.20’s. Simply put – KC has greater room to run higher vs. Chgo.
Daily Support & Resistance
March Chgo Wheat: $4.12 – $4.24
March KC Wheat: $4.13 – $4.28
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