Wheat Commentary
March Chgo Wheat expires ¼ cent lower ($4.12), May closes unchanged ($4.30 ½) and July ¾ cent lower ($4.45 ¾)
March KC Wheat expires ¾ cent higher ($4.33 ¼), May closes ¼ cent lower ($4.42 ½) and July ¼ cent lower ($4.54 ½)
Egypt announces an overnight tender for optional origin wheat
Wheat prices try to stabilize after seeing the 7th day in a row of new lows for the current break. The best stimulus for the attempt at stabilization came from the corn market. Longer term forecasts (month end) still suggest decent moisture for the drier areas of the HRW belt. Short term forecasts continue to suggest a drier bias – some forecasters are suggesting that whatever moisture we see over the near term will only affect the northern and eastern fringes of the central and southern Plains. I remained surprised by the magnitude of the current break considering most private analysts are suggesting the lowest wheat acreage in this country going back literally decades – I saw someone tout the lowest in the past 108 years. The bottomline for the poor price action is the global competition the US has in vying for market share.
No changes are being seen with the interior basis for both SRW and HRW. Gulf values for SRW improve by 3 cents while HRW Gulf values run unchanged. Chgo spreads improve with the May contract finishing unchanged while its forward contracts ran ¾ to 1 cent lower. KC spreads ran about ½ cent better.
Although wheat prices finished unchanged to fractionally lower there are signs favoring an attempt at some stabilization. That doesn’t mean we can’t go lower- it suggests we may be hard pressed to keep it much lower. For the time being I’ll see if my idea of stabilization is correct before jumping in and trying to pick a bottom.
Daily Support & Resistance for 03/15
July Chgo Wheat: $4.40 – $4.52
July KC Wheat: $4.49 – $4.62
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