Wheat Commentary

storck

Just My Opinion – Wheat

Wheat Commentary
July Chgo wheat closes 1 ¼ cents lower ($4.25 ¾), Sept ½ cent lower ($4.39 ¾) and Dec ¼ cent lower ($4.61 ½)
July KC Wheat closes ½ cent lower ($4.26), Sept ½ cent lower ($4.43 ¼) and Dec ¾ cent lower ($4.68)
Weekly Wheat Export Sales – 247.5 K T. old crop vs. 0-200 K T. expected; 393.1 K T. new crop vs. 200-400 K T. expected
Spillover selling from the corn and soybean complex keeps the wheat market in check. In the early going wheat prices did challenge recent lows but as the day’s trading went on it was clear to see the wheat market trying to divorce itself from those two markets. Wheat prices, after the lows were made, did flirt with higher prices but were not able to sustain it through the close. Wheat harvesting is just getting under way in Texas – quality is not the best and it appears harvested acres will be down. Forecasts currently do not suggest the best weather for finishing the crop.
Basis levels for SRW remain quiet both in the interior and at the Gulf. Interior basis levels for HRW are mostly steady with a couple of locations appearing to reach for some origin. After recent HRW easing that Gulf it appears to be firming back up. Spreads ran softer in Chgo while staying flat in KC. It should be noted that the nearby Chgo July/Spt spread has traded in a sideways 5-6 cent range dating back to last September. The KC spread is almost similar while showing better technical signs of rally potential.
Given all of the selling around in the Ag complex on Thursday I thought the wheat market put in a great performance. Recent lows were challenged on a couple of different occasions during the day and they continue to stand in. I remain with the frame of mind that the risk in this market is to the upside, not to the downside at least from current levels.
Daily Support & Resistance for 05/19
July Chgo Wheat: $4.22 – $4.32 ($4.36)
July KC Wheat: $4.22 ($4.20) – $4.35

 

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