Wheat Commentary
March Chgo Wheat closes 2 ¼ cents lower ($4.36), May 2 cents lower ($4.56 ½) and July 1 ½ cents lower ($4.71 ½)
March KC Wheat closes 1 cent lower ($4.63 ¼), May 1 ½ cents lower ($4.72 ½) and July 1 ¼ cents lower ($4.84 ½)
Flat price wheat began the day session with a fair run of spec selling. The idea was the market’s inability to follow through to the upside after Monday’s action was able to buck the bearish trend elsewhere in the Ag complex. The selling we saw on Tuesday held the support that was established late last week. Short covering late challenged unchanged levels. The rationale for wheat ownership (KC)/short covering (Chgo) is the low winter acres coupled with the dry bias out in the western reaches of the central southern Plains. Given the warmer than normal late winter, early spring the crop is maturing faster and that leaves it vulnerable to any late season freezes. I have to point out that among the global exporters the US (as of this writing) is the only nation with noticeably lower plantings. So far Western Europe is touting a good winter crop as is Eastern Europe. Russia, so far, is not touting any short comings with their winter crop. I’m discounting the report out of Australia from yesterday where they suggested their next season crop could be off as much as 8>0 M t. from last season’s crop – why – Australia is still 1 ½ months away from getting anything planted.
Toledo raises its bid for SRW by 5 cents. All other interior locations are running unchanged. SRW at the Gulf continues to be quiet while the HRW at the Gulf continues to be firm. may forward spreads in Chgo continue to leak wider. KC spreads see little change. At this point in time, at least until the new crop sees a serious threat, focus is on the new crop.
All I can say is the flat price stands in at suspected support levels. It was a little shaky looking at midday when prices were down 8 cents or so but the short covering late shows all of the signs of a market that wants to go higher. short covering is making the market in Chgo and new buying is making the market in KC.
Daily Support & Resistance for 03/08
July Chgo Wheat: $4.66 – $4.80
July KC Wheat: $4.80 – $4.90 ($4.95)
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