Wheat Commentary
July Chgo wheat closes 8 ¾ cents lower ($4.29 ½), Sept 7 ¼ cents lower ($4.44) and Dec 7 cents lower ($4.66 ½)
July KC Wheat closes 4 ¼ cents lower ($4.33 ¼), Sept 4 cents lower ($4.51 ¼) and Dec 3 ½ cents lower ($4.76 ½)
WeeklyWheat Export Inspections – 602.9 K T. vs. 450-650 K T. expected
Egypt announces an overnight tender for optional origin wheat
Winter Wheat Crop Progress/Conditions -80% Headed vs. 77% 5-year average – 50% GE vs. 52% expected vs. 63% year ago
Spring Wheat Crop Progress/Conditions – 96% planted vs. 96% expected – 79% emerged vs. 74% 5-year average – 62% GE vs. 71% expected vs. 79% year ago
Chgo wheat leads the wheat varieties lower on Tuesday. Not so wet weather for the SRW areas had the trade thinking that just maybe the condition of the soft wheat crop may not be so dire. KC, initially, went along for the ride but as the day wore on KC started to gain on Chgo. Ongoing harvest in Texas and parts of Oklahoma talks about iffy yields (protein content) as well as grazed out acres. The bottom line continues to be wheat prices move sideways not far above recent lows.
Interior wheat basis levels ran unchanged on the day. Interior locations bidding for SRW are holding on to last week’s bump higher. The Gulf market for SRW continues to hold on to the modest gains it made last week. Spreads involving the nearby July were noticeably lower while the Sept forward spreads ran mostly unchanged. Interior HRW basis bids run unchanged while the gulf continues to show a steady to firm bias. Despite the firm Gulf appearance KC spreads ran easier on the day. There is an old adage that once winter wheat harvest starts one is not supposed to be outright long wheat.
Let it be written that Tom Fritz says the wheat market is in the process of making long term lows. Despite the poor looking performance on Tuesday we did nothing to violate my chart perceptions that the Chgo and KC markets are in the process of making long term lows. Tonight’s data from the USDA (crop ratings) as well as the overnight Egyptian tender should lend initial support for the overnight trade.
Daily Support & Resistance for 05/31
July Chgo Wheat: $4.26 – $4.39
July KC Wheat: $4.30 – $4.33
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.