Wheat Commentary
Sept Chgo wheat closes 10 ¼ cents lower ($4.19 ¼), Dec 9 cents lower ($4.47) and March 7¾ cents lower ($4.69 ½)
Sept KC Wheat closes 7 cents lower ($4.19 ½), Dec 7 cents lower ($4.47) and March 6 ¾ cents lower ($4.65 ¼)
Overnight Egypt buys 355 K T. wheat – 295 K T. Russian, 60 K T. Ukrainian – US wheat was not offered
Weekly Wheat Export Sales – old crop vs. 300- 600 K T. expected – new crop vs. none expected
The “swan dive” in the Chgo and KC wheat markets continues. The Mpls market has already traded 40 cents off of Monday’s lows but this market is being discounted due to its lack of liquidity. It’s the Chgo and KC markets that best reflect the World wheat scenario and that scenario is currently awash with wheat. The latest country to talk about a new record sized crop is India. It’s not that India exports that much (very little in fact) but they won’t need to import any. The bottom line is that US wheat is still searching for better demand and to date it has not found it (US wheat was not even offered at the latest Egyptian tender).
Interior cash wheat prices remain quiet. The bid for HRW at the Gulf remains firm. I believe a combination of slow movement coupled with quality protein demand is mostly responsible for the firm Gulf bid. Export demand for SRW (in my opinion) is no big deal.
One of these days the “swan dive” in Chgo and KC is going to exhaust itself. So far the price action doesn’t show it. Yes, prices are flirting with oversold but it’s still not that dramatic. All downside price objectives that I can come up with have been met. When we do run into exhaustion it will come without notice. Until that time my friends, until that time.
Daily Support & Resistance for 08/17
Dec Chgo Wheat: ??? – $4.60
Dec KC Wheat: ??? – $4.60
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