Wheat Commentary
May Chgo wheat closes 8 ¾ cents lower ($4.21), July 7 cents lower ($4.35 ¾) and Dec 6 ¾ cents lower ($4.70)
May KC Wheat closes 11 cents lower ($4.16 ¼), July 10 ¼ cents lower ($4.29) and Dec 10 ¼ cents lower ($4.70 ¼)
Weekly Wheat Export Inspections – 671.8 K T. vs. 400-600 K T. expected
Winter Wheat Conditions – 54% GE vs. 54% expected vs. 53% last week vs. 57% last year
Winter Wheat Crop Progress – 19% Headed vs. 9 % last week vs. 11% last year vs. 13% 5-year average
Spring Wheat Planted – 13% vs. 14% expected vs. 9% last week vs. 25% last year vs. 21% 5-year average
Chgo wheat prices were led lower by the failing KC market. Recent rains (and additional forecasted rains) in the central southern Plains are giving traders ideas that yields could be high enough to offset the lower planted acres. Mpls prices were only modestly lower due to ideas that spring planting rates will continue to lag the 5-year norms. Better than expected export inspections drew a blind eye as the nearby spreads lost noticeable ground.
Interior cash wheat markets (basis) remain relatively quiet. The HRW basis for export continues to show a firm bias while the export market for SRW is softening ever so slightly. Chgo spreads, after rallying last half March into the first week of April, are once again on the defensive. KC spreads which had been trying to firm now look like they’re going nowhere fast. The spread action is reflective of the poor flat price performance.
Just when I think the wheat market is gaining some traction for a rally – bam – failure!! I guess the wheat market remains the inter-market spreader favorite short. What I thought was an attempt at some interim basing action last week fails miserably on Monday. Yes, we still have some technical support just below current levels but daily momentum indicators are suggesting the recent attempt at rallying is on the verge of failure. Wheat prices have been trading range affairs dating back to last September. Will this trading range live on??? What about US acreage at decades’ low?
Daily Support & Resistance for 04/18
July Chgo Wheat: $4.30 – $4.43
July KC Wheat: $4.23 – $4.38
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.