Wheat Commentary
March Chgo Wheat closes 12 ½ cents lower ($4.18 ¾), May 9 ¼ cents lower ($4.38 ¾) and July 8¾ cents lower ($4.53 ¼)
March KC Wheat closes 9 ¾ cents lower ($4.44), May 10 cents lower ($4.57) and July 9 ¾ cents lower ($4.68 ¾)
Weekly Wheat Export Inspections – 537.8 K T. vs. 350-550 K T. expected
Egypt announces an overnight tender for optional origin wheat.
Flat price wheat takes it on the chin as well as the nearby spreads. I’m not sure if the trade is that fearful of deliveries (Friday registrations show Chgo at 395 and KC at 777) or does the spec want their shorts back. From Feb 7th to Feb 15th specs had covered about 30 K shorts but since then they have added back about 21 K. Forecasts for the central southern US Plains talk about dryness but no damaging temps. Our global competition is suggesting their respective winter wheat crops are in okay shape.
Interior cash wheat basis continues to see little change. SRW for export, too, remains quiet while HRW for export continues to firm. Chgo spreads got rocked ahead of 1st notice day. KC spreads remain quiet while being wide. I might be out in left field with this idea but I have a hard time wheat spreads getting any wider vs. what we saw today; deliveries or no deliveries.
From the Dec 23rd low to the Feb 16th high July Chgo had a 68 ¾ cent move. Half way back of that move is $4.54 3/8 – we’re there. The 61.2% retracement is $4.46 5/8. The July KC market is has yet to challenge its 50% retracement, $4.60 7/8 but it is getting close. I could be wrong but I’ve been touting the possibility that the wheat markets have been in the process of making long term lows – current price levels are starting to look attractive for that idea.
Daily Support & Resistance for 02/28
July Chgo Wheat: $4.50 ($4.46) – $4.60
July KC Wheat: $4.64 – $4.77
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