Wheat Commentary
May Chgo wheat closes 4 cents lower ($4.20 ¾), July 4 ¾ cents lower ($3.34 ¾) and Dec 4 cents lower ($4.69 ¾)
May KC Wheat closes 6¾ cents lower ($4.21 ¼), July 6 ¾ cents lower ($4.34 ¼) and Dec 6 ¼ cents lower ($4.71 ½)
Weekly Wheat Export Inspections – 541.8 K T. vs. 450-650 K T. expected
Rain over the weekend in the Central southern US Plains and forecasts for more to come in the near term continues to have the KC market liquidating spec longs. This in turn has the Chgo spec adding to his shorts. Adding to the ugly price action are the global wheat markets (Europe and Russia) plunging lower as well. As much as I would like to say the flat price has gone low enough for now the price action, so far, disagrees. There was a feeble attempt at short covering late in the day – I say feeble as the trade could not (would not) sustain it. For what it is worth weekly wheat export inspections were deemed middle of the road based on expectations. “Middle of the road” doesn’t cut it when the market is on a death spiral such as we are currently experiencing.
Interior cash whet markets remain quiet. Export markets for cash wheat remain quiet as well. Chgo spreads have been trying to firm for the past few days but nothing to the point that is influential to the flat price. Deliverable Chgo wheat registrations have been declining in recent days and that appears to be what is behind the minor uptick in the nearby Chgo spreads. KC spreads continue to be soft looking as the May/July sits at contract lows.
I would like to say that the flat price of wheat is in a good support area. This is based on looking at daily charts and making comparisons to the price action we saw earlier in the year. This observation is for the Chgo contract. As far as the KC contract is concerned I have the following observation – on March 14th we saw an interim low on the July contract at $4.51 ¼ – 3 ½ days later the market flagged up to the $4.70 level and then broke down. That attempt at correction followed by failure measures to $4.32 ½ – today’s low was $4.32 ¾. I would like to think we have enough degree of oversold, both inter-day and daily, that the flat price should be able to find some support in this general area at least until we see what the USDA has to say on Friday.
Daily Support & Resistance for 03/28
July Chgo Wheat: $4.31 – $4.41
July KC Wheat: $4.30 – $4.40
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