Wheat Commentary
May Chgo wheat closes 1 ¼ cents lower ($4.41 ½), July 2 cents lower ($4.54) and Dec ¾ cent lower ($4.89 ¼)
May KC Wheat closes 2 cents higher ($4.54 ¾), July 2 cents higher ($4.67 ¾) and Dec 2 ¾ cents higher ($5.04 ¼)
The different US wheat markets ran like apples compared to oranges compared to lemons on Tuesday. The Mpls market (HRS) was the weakest in response to drier forecasts along with some better drying temps. The KC market finished just modestly better as early yield results from the Kansas wheat tour suggested average yields (it needs to be noted that the tour was in north central Kansas where past weekend weather was not as severe when compared to western Kansas). The tour is scheduled to get into western Kansas sometime tomorrow. Chgo prices were caught in the middle.
Interior cash wheat prices are hinting at better levels. This holds true for export values as well. I’m not sure possible crop damage is behind this as more than ample deliveries continue to circulate. It is becoming noticeable that both the Chgo and KC spreads are showing some buying interest in the deferred contracts – is that suggesting crop damage or just jamming more carry into the price structure?
Monday’s price action was sharply higher – Chgo gave back 1-2 cents of the sharply higher rally. That’s not bearish as far as I’m concerned. Technically speaking all we did was alleviate a short term overbought. The KC market finished with only modest gains on Tuesday but the two-sided trade did work to alleviate Monday’s short term overbought. Until we have a better handle on the potential damage from this past weekend’s severe weather (both SRW and HRW) these markets should stay relatively firm.
Daily Support & Resistance for 05/03
July Chgo Wheat: $4.45 – $4.61 ($4.70)
July KC Wheat: $4.60 – $4.75 (?)
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