Wheat Commentary
July Chgo wheat closes 3 cents higher ($4.32 ½), Sept 2 cents higher ($4.46) and Dec 1½ cents higher ($4.67 ¾)
July KC Wheat closes 2 ¼ cents higher ($4.32 ¾), Sept 2 ¼ cents higher ($4.50 ½) and Dec 1 ¾ cents higher ($4.75 ¾)
Weekly Export Sales – old crop vs. 0-200 K T. expected – new crop vs. 250-450 K T. expected
Wednesday saw wheat prices bounce off of suspected support levels and so far these levels are holding. The supportive issues are too many spec shorts in the market as well as concerns over quality issues with the winter crop as well as the potential for abandoned acres. As long as suspected support levels continue to hold I’ll maintain my bias that wheat prices are in the process of carving out long term lows.
Interior cash wheat prices continue to be quiet. Export values for SRW show little change while export values for HRW continue to firm. Concerns are developing whether or not the winter crop will be able to make delivery specs not only for the exchanges but for export as well. With that said we saw Chgo spreads improve while KC spreads stay relatively flat up front and fractional improvement vs. deferred contracts. I have to wonder if the minor spread improvements featured some up front flat price short covering.
My opinion of the flat price action is still that of long term lows are being carved out. If I can see closes above Monday’s highs I’ll say it may finally be happening. Until then I’ll continue to advocate buying breaks to suspected support levels.
Daily Support & Resistance for 05/25
July Chgo Wheat: $4.26 – $4.38
July KC Wheat: $4.28 – $4.40
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