Wheat Commentary
Sept Chgo wheat closes 2 ¼ cents lower ($5.03 ¾), Dec 4 ½ cents lower ($5.26 ¾) and March 4 cents lower ($5.46)
Sept KC Wheat closes 3 ¾ cents lower ($5.02 ¾), Dec 3 ½ cents lower ($5.29 ¼) and March 3 ½ cents lower ($5.45 ½)
Egypt announces an overnight tender for optional origin wheat – Overnight Egypt buys 300 K T. of wheat; 120 K T. Russian, 120 K T. Romanian and 60 K T. French – US wheat was not offered
Once again Mpls wheat trades in its own little world as prices there were strong while Chgo and KC attempts to rally were unsustainable. At one point early in in the day session Chgo and KC prices were trying to register an interim buy signal only to fail as the session went on. This suggests these two markets remain in a liquidation mode. The failure to even see US wheat offered at the Egyptian tender suggests we are not competitive as well as World wheat supplies remain more than ample. The more than ample World stocks work to offset the supposedly short US crop; spring wheat in this instance. It was taught to me a long time ago that if one was bullish a particular commodity you bought that commodity not something different. In this case we are talking about Mpls wheat (HRS) vs. Chgo (SRW) and KC (HRW).
Advertised cash wheat markets continue to be relatively quiet. I do hear that premiums for protein are starting to come back after last week’s slaughter. The export market for both HRW and SRW continue to be quiet. It was interesting to note that despite the poor flat price performance in Chgo bull spreads were working. Bear spreads were working fractionally in KC.
For the past few days I have been thinking the $5.00 mark in both Chgo and KC would offer some technical support. After Tuesday miserable looking flat price performance it looks like we could see the flat price dive a bit deeper than originally thought; now I’m thinking something closer to $4.90. I’m well aware of the adage that the original idea is the best idea so I hope I’m not getting too cute here.
Daily Support & Resistance for 07/19
Sept Chgo Wheat: $4.95 – $5.15
Sept KC Wheat: $4.95 – $5.15
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