July Chgo wheat closes 10 ¾ cents higher ($4.53 ¾), Sept 11 ¾ cents higher ($4.69) and Dec 11 ½ cents higher ($4.90 ½)
July KC Wheat closes 7 ¾ cents higher ($4.65 ¼), Sept 8 ¼ cents higher ($4.83 ¼) and Dec 9 ¼ cents higher ($5.08 ½)
Weekly Wheat Export Sales – 373.3 K T. old crop vs. 350-550 K T. expected; no new crop vs. none expected
In the early going Mpls wheat was down as much as 17-18 cents. KC was down as much 7-8 cents and Chgo was down as much as 6-7 cents. The break did not last long as prices came surging back. Interesting to note Chgo led the comeback. I believe this was tied to inter-market spreading. On the way up earlier this week Mpls led prices higher with KC training and Chgo trailing even more. When Mpls started correcting lower its losses were the greatest followed by KC and then Chgo. Now that prices are rebounding from the recent correction and Chgo is the strongest it tells me wheat prices are still in a pseudo correction phase. The bottom line is that wheat prices are still headed higher.
There are strange happenings in the SRW interior market. Recent basis advances on the Ohio River tells me they want wheat. The other day I heard Evansville, IN wants wheat. That same day I heard Decatur, IN wasn’t really looking for wheat but today they are. All this is going on as SRW harvest is underway. Not much happens with in the interior HRW basis but the Gulf for HRW stays hot. Since early May the Gulf basis for HRW is up 70-75 cents. Not much interest is showing for SRW at the Gulf. In Chgo July loses to Sept and Dec while Sept and Dec gain on deferred contracts. It’s a similar scenario in KC.
Have you ever heard the phrase “You can’t keep a good man down!”? The wheat market is the “good man”. Thursday’s price action was nothing short of impressive in regards to prices going higher. Shorts continue to cover in Chgo and longs continue to add in KC. It will be interesting to see what kind of spring ratings we see Monday afternoon following this week’s rainfall in the Dakotas. Failure to show noticeable improvement should result with yet higher prices.
Daily Support & Resistance for 06/16
July Chgo Wheat: $4.48 – $4.62 (?)
July KC Wheat: $4.58 – $4.76 (?)
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