Wheat Commentary
Sept Chgo wheat closes 6 ¾ cents higher ($4.10 ¼), Dec 4 ¾ cents higher ($4.34 ½) and March 4 ¼ cents higher ($4.57)
Sept KC Wheat closes 8 ½ cents higher ($4.08 ¾), Dec 7 cents higher ($4.36 ¼) and March 6 ½ cents higher ($4.54)
Weekly Wheat Export Sales – 535.9 K T. old crop vs. 300-600 K T. expected – 30.3 K T. new crop vs. none expected
Stats Can Wheat Production – 25.54 M T. vs. 26.2 expected
1st Notice Day Wheat Deliveries – Chgo – none vs. 184 registrations – KC – 275 vs. 905 registrations – Mpls – 1141
I saw Thursday’s price action as month end short covering. A lack of deliveries against the Chgo market was deemed friendly. KC deliveries were deemed a non-event as they could have been larger. I believe prices could gone even higher but the Mpls market acted as a drag on prices. Unexpected large deliveries acted as a tremendous weight on the Mpls market. I found it interesting that the Stats Can number supported the idea of a lower NA spring wheat crop but then here comes the large Mpls deliveries. Weekly export sales were okay vs. expectations but that was about it. My bottom line is Thursday was all about short covering.
The Gulf needs HRW but the rail system can’t get it there. Not much happens elsewhere in the wonderful world of cash wheat. Spreads in Chgo ran mixed while KC spreads were noticeably firmer. KC spreads have been running flat along their wider end; today’s price action is viewed as a buy signal on the charts.
The price action in both Chgo and KC are trying to resemble bottoming formations. I remain a bit skeptical because I thought I saw something similar 45 cents ago. For the time being I’ll say the market remains prone to further short covering and let it go at that.
Daily Support & Resistance for 09/01
Dec Chgo Wheat: $4.29 – $4.41
Dec KC Wheat: $4.30 – $4.43
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