Wheat Commentary
March Chgo Wheat closes 7 ¾ cents higher ($4.26 ¼), May 7 ¼ cents higher ($4.36 ½) and July 7 ¼ cents higher ($4.49 ¼)
March KC Wheat closes 8 cents higher ($4.34 ½), May 8 cents higher ($4.46) and July 7¾ cents higher ($4.57)
Weekly Wheat Export Sales – old crop vs. 200-500 K T. expected – new crop vs. 0-25 K T. expected
Bloomberg Survey suggests the US wheat carryout is 1.141 billion bu. (-2 million bu.)
The flat price rally that started on Wednesday follows through on Thursday. The rationale for the rally continues to be the weakness in the US Dollar, poor wintering conditions for winter wheat, the idea of lower winter wheat acres, anticipated index fund rebalancing (buying) and technical considerations (flat price flies through its 100 day MA).
Interior cash wheat prices continue to be slow movers so one has to look close for changes. The only change I saw today is that Goodland KS is 10 cents better. Export prices, for the most part, continue to hold their own. Chgo spreads continue to show a bullish bias and KC spreads inch in (fractional improvement).
Back last mid-July resistance for Chgo wheat was set at $4.40. The recent price action suggests that level can be challenged with the current rally. KC prices now sit on top of the price action that was seen over the past 6 months. One has to go back to late June to find prices this good. As I alluded to yesterday the current rally is coming fast and furious – makes sense considering the Chgo market has the greatest amount of spec shorts vs. any other of the grain markets. Bottom line – I don’t think the rally is over yet. Short term inter-day technical data reads rather high but that can be alleviated with just a day or so with some backing and filling.
Daily Support & Resistance for 01/06
March Chgo Wheat: $4.18 – $4.32
March KC Wheat: $4.26 – $4.44
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