December Chgo Wheat closed 7 ¼ cents lower ($4.93), March 7 ¼ cents lower ($4.99 ¾) & July 6 ¼ cents lower ($5.10)
December KC Wheat closed 10 cents lower ($4.03 ¼), March 9 ¾ cents lower ($4.16 ½) & July 9 cents lower ($4.36 ¾)
December Mpls Wheat closed 6 ½ cents lower ($5.35 ¼), March 6 ½ cents lower ($5.49) & July 6 ¾ cents lower ($5.65 ¾)
Weekly Wheat Export Sales – 521.9 K T. old crop vs. 300-600 K T. expected – no new crop vs. none expected
Highlights of USDA Wheat Supply-Demand Report – Carryin increases by 8 M bu., Production declines by 18 M bu., Domestic usage declines by 30 M bu., Exports decline by 25 M bu., Carryout increases by 29 M bu., World carryout increases by 1.29 M T.
Long story short is that the USDA supply-demand data led to a larger than expected carryout projection. The decline in export projections confirms my beliefs that US origin is a secondary market behind the EU and the Black Sea. This data did not include a higher Russian crop which most believe will ultimately occur. Recent rhetoric out of Russia would suggest a noticeably higher crop size; high enough to more than offset decreases elsewhere.
Interior wheat basis levels continue to run relatively quiet. This holds true for export values as well. Chgo wheat spreads ran steady upfront while losing ground as time went on. KC spreads saw similar price action.
The recent flip-flop price motion while trying to stay firm was dealt a bearish blow today. Today’s price action in Dec Chgo highlights what I perceive as sell-stops below the mid-$4.80’s. The same holds true for Dec KC below the $3.98 level.
Daily Support & Resistance for 10/11
Dec Chgo Wheat: $4.86 – $4.98
Dec KC Wheat: $3.94 – $4.08
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.