Wheat Commentary
Sept Chgo wheat closes 11 ½ cents lower ($4.29 ½), Dec 11 ¾ cents lower ($4.56) and March 10 ¾ cent slower ($4.77 ¼)
Sept KC Wheat closes 10 ¼ cents lower ($4.26 ½), Dec 10 ¼ cents lower ($4.54) and March 10 cents lower ($4.72)
Egypt announces an overnight tender for optional origin wheat.
So much for Monday’s price action trying to suggest we have gone low enough for the near term. Today’s close in Dec Chgo wheat is only 3 cents shy of its contract low. Dec KC wheat registered a new contract low as well as a new contract low close. Price action such as this does not bode well for immediate recovery. I think what is happening right now is the US wheat markets are trying digest a larger World crop and so far the price action is suggesting we have yet to accomplish that.
Not much happens with the interior cash wheat bids. Bids for wheat at the Gulf, however, have a firm bias as wheat movement (like the rest of the grain sector) is seeing extremely limited interest in selling. Not much happened with Chgo spreads Tuesday but they are trying to suggest support may have been realized. KC spreads exhibit nothing of the sort as they stay wide.
For what it is worth the 14-day RSI for Dec Chgo wheat is 27.92 and for Dec KC wheat 26.07. This is what I call flirting with oversold but not quite there. Daily momentum indicators have suggested oversold for nearly the last 50 cents down. One of the functions of lower prices is to find demand – so far we haven’t found it. Will US wheat be offered at the overnight Egyptian tender?
Daily Support & Resistance for 08/16
Dec Chgo Wheat: ??? – $4.69
Dec KC Wheat: ??? – $4.66
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