March Chgo Wheat closed 17 ¼ cents higher ($5.49 ¾), May 16 ½ cents higher ($5.51 ¼) & July 13 ½ cents higher ($5.51 ¼)
March KC Wheat closed 19 ¼ cents higher ($4.62), May 19 ¼ cents higher ($4.69 ¾) & July 19 cents higher ($4.76 ¼)
March Mpls Wheat closed 11 ¼ cents higher ($5.37), May 11 cents higher ($5.45) & July 10 ¼ cents higher ($5.53)
Weekly Wheat Export Inspections – 506.2 K T. vs. 300-500 K T. expected
Spec and fund shorts are on the run. It’s a combination of factors behind their short covering; the China trade deal (most probably HRS; at least that is what they have taken in the past), winter wheat seeding issues in the Black Sea (too dry) and in the EU (too wet), some dryness concerns developing in the southwestern US HRW areas and last but not least Argentina hiking export taxes.
Advertised interior basis levels for standard protein wheat run unchanged. The export market for HRW is fully steady but firm. The export market for SRW is higher. I do hear of some stout premiums being paid for quality milling wheat (if anyone is willing to sell). Chgo spreads are strong especially against the new crop. KC spreads ran steady within the crop year while old crop gained on the new crop. Overall KC spreads did not have the strength Chgo spreads saw.
So here’s the deal – major global wheat exporters are having problems with their respective new crops. Lower acreage for the EU, the Black Sea and the US does not leave any room for crop problems. With that said I can’t imagine any spec wanting to be short. The question now becomes how much he is willing to pay up. The most recent correction we saw in March Chgo measures to $5.76; just above the late June, early July high. On the Chgo weekly continuation chart I see an interim high at $5.58 from last July. After that I see $5.90 to $6.00. The March KC chart has blown away its recent sideways idea with the clear-cut close above the $4.50 level. The KC weekly chart now suggests its next challenge is the $4.95-$5.00 level.
Daily Support & Resistance for Dec 17th
March Chgo Wheat: $5.40 – $5.66 ($5.75)
March KC Wheat: $4.52 – $4.73 (4.82)
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.