Wheat Commentary
July Chgo wheat closes 9 ¾ cents lower ($4.50), Sept 8 cents lower ($4.65 ½) and Dec 7 ¼ cents lower ($4.88)
July KC Wheat closes 11 ¼ cents lower ($4.53), Sept 11 cents lower ($4.71 ½) and Dec 10 ½ cents lower ($4.97 ¼)
Weekly Wheat Export Inspections – 629.0 K T. vs. 450-650 K T. expected
Weekly Winter Wheat Progress & Condition – 41% harvested vs. 44% expected vs. 39% year ago – 49% GE vs. 50% expected vs. 62% year ago
Weekly Spring Wheat Progress & Condition – 36% headed vs. 52% year ago – 40% GE vs. 41% expected vs. 72% year ago
Mpls wheat continues to divorce itself from the KC and Chgo markets as it manages to finish a couple of cents higher (noting that it did finish 10-12 cents off of the day’s highs). The Chgo and KC markets were lower virtually all day long as profit taking hit these two markets relatively hard. The other day I thought the US wheat markets were in the process of making interim highs – I’m still uncertain about the Mpls markets while the Chgo and KC sure do look like interim highs are in place. Late last week there had been some concerns developing about the western European crop – those fears are slowly but surely being put to rest. The Ukraine hot weather fears remain in place.
Interior cash wheat markets continue to show little change. Demand for Oklahoma origin is holding on to last week’s minor improvement. Demand for HRW at the Gulf is receding a bit. Chgo spreads get hit relatively hard from the flat price profit taking as well as first notice day jitters. KC spreads continue to inch wider. There has been a lot of talk about the low protein in this year’s winter wheat crop. One has to remember that lower protein wheat is acceptable for delivery against KC and Chgo. If the lower protein is indeed becoming a major issue holders of the lower protein deliverable supply just may hold on to them. If that comes to fruition spreads should rocker tighter after first notice day.
Charts for Chgo and KC wheat look like interim tops. If the price action is indeed just “interim tops Sept Chgo wheat should try and realize support in the mid-high $4.50’s and Sept KC wheat in the mid $4.60’s. The price action in Sept Mpls contract just looks the pause that refreshes. As far as Friday’s USDA reports are concerned I doubt the Quarterly Stocks figure will have much impact. The wild card to the acreage report is not so much planted acres but rather harvested acres.
Daily Support & Resistance for 06/27
Sept Chgo Wheat: $4.58 – $4.80
Sept KC Wheat: $4.65 – $4.90
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