Wheat Commentary
March Chgo Wheat closes 7 cents lower ($4.47 ¾), May 7 cents lower ($4.61 ¼) and July 6 ¼ cents lower ($4.73 ¾)
March KC Wheat closes 11 ¼ cents lower ($4.58), May 11 cents lower ($4.71) and July 10 ¼ cents lower ($4.82 ¾)
Weekly Wheat Export Sales – 569.1 K T. old crop vs. 300-500 K T. expected – 19.5 K T. new crop vs. 0-50 K T. expected
Egypt announces on overnite tender for optional origin wheat
It was a very interesting wheat trade on Thursday. Thursday’s trade started out higher after being easier Wednesday night. The trade was responding to better than expected weekly export sales. Then things started getting interesting – Mpls started leaking and it was leaking badly. As the morning went on it became that the bull spreads in Mpls, both intra-market and inter-market, were being unwound. This is all evidenced by the March/May Mpls spread losing 3 ¾ cents, Mpls loses 6 ½ cents to KC and loses 10 cents to Chgo. Because of the Mpls leaking it caused KC to lose 4 cents to Chgo (unwinding hard vs. soft). The bottom line to all of this at days’ end is the price action is advertising the current rally is over with for a time.
Interior cash wheat markets remain. Not much is happening with the SRW export market while HRW for export stays firm. Chgo spreads ran steady to softer on day reflecting the flat price selling while KC spreads ran fractionally easier on the day.
Flat price wheat registers a nasty looking reversal on the day. Chgo March can trade down to $4.30 before realizing support. KC March wheat can trade down to $4.40 before realizing support. The bottom line is that these markets have room to sell-off and still honor my ideas that the US wheat markets have carved out long term bottoms.
Daily Support & Resistance for 02/17
March Chgo Wheat: $4.40 – $4.53
March KC Wheat: $4.50 – $4.65
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.