December Chgo Wheat closed 2 ¾ cents higher ($5.34 ¾), March 1 cent higher ($5.23 ¾) & July 1 cent higher ($5.29 ¾)
December KC Wheat closed 4 ½ cents higher ($4.16), March 5 ¼ cents higher ($4.31 ¼) & July 4 ½ cents higher ($4.47)
December Mpls Wheat closed unchanged ($4.97), March 4 ¾ cents higher ($5.18) & July 4 ½ cents higher ($5.36)
Overnight Egypt buys 355 K T. of wheat – 60 K T. Ukraine, 60 K T. Romania, 115 K T. Russia & 120 K T. France – Average FOB price $222.44 ($221.90 last week), Average CIF price $238.19 ($235.94 last week)
Highlights USDA Wheat Supply-Demand Report – lowered US imports by 15 million bu., increased US exports by 25 million bu., lowered US carryout by 40 million bu. – World carryout increases by 1.22 M T. – take China out of the mix and World carryout comes down 0.57 M T.
Egypt continues to pay up on the world market for wheat. The overnight tender suggests they paid $2.26 a ton higher vs. what they bought last week. I was a bit surprised the USDA increased US exports (I am told US HRW is getting competitive out there in the World export circles). Lowering exports is understandable considering the rising World prices. One of the headlines after the supply-demand report is that the US wheat carryout is at 5-year lows. 974 million bu. doesn’t sound that low nor does the stocks-to-usage ratio, 45.7%, sound that tight. It’s just that it has been quite some time since we’ve seen numbers like this. The market (Chgo) tried to rally on what the report said but struggled to finish higher on the day.
I’m not seeing any changes with the advertised interior wheat basis for ordinary protein. The Gulf is maintaining its recent softer tone for HRW while SRW is fully steady. Chgo wheat spreads ran fractionally mixed while KC spreads showed a slight bullish bias.
It looks like we have a new variety leader in the US wheat markets (at least for today). In the supply-demand report it was HRW (-10), HRS (-10) and Durum (-20) that saw the decreases in carryout. Carryout projections for SRW ran unchanged while still being tight. I don’t think the spread play for quality is going to go away anytime soon. Is the quality issue enough to keep the flat price alive? For the time being I’ll stick with the trading range idea.
Daily Support & Resistance for Dec 11th
March Chgo Wheat: $5.20 ($5.16) – $5.30 ($5.34)
March KC Wheat: $4.25 – $4.38
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