March Chgo Wheat closed 8 cents lower ($5.48 ¼), May 7 ¼ cents lower ($5.51 ¾) & July 5 ½ cents lower ($5.53 ½)
March KC Wheat closed 4 ¾ cents lower ($4.62 ¼), May 4 ½ cents lower ($4.70 ½) & July 3 ¾ cents lower ($4.77 ½)
March Mpls Wheat closed ¼ cent lower ($5.38 ½), May ½ cent lower ($5.46 ½) & July 1 ¼ cents lower ($5.54 ¼)
Weekly Wheat Export Sales – old crop vs. 200-600 K T. expected – new crop vs. none expected
Flat price wheat sees its 2nd day of consolidation following the recent 40 cent rally. I think the consolidation/backing and filling was a result of no new news to extend the recent fund buying. I don’t think the underlying fundamentals have changed (Argentina’s new export duties, the ongoing problems with dryness in the Black Sea area, the too wet scenario in the EU, the once again lower US winter wheat acres and lastly the China/US trade deal). It’s just that the bull needs to be fed every day. Tomorrow is export sales day so that will have influence as will whatever is going on in the overseas markets. Other than the quality issues the SRW market has I still think the US wheat market is more of a follower vs. being a leader.
The interior advertised wheat basis for standard protein runs unchanged. The same can be said for the Gulf basis. I’m told the interior basis for quality milling SRW is dramatically higher. Spreads in Chgo softened due to the flat price selling. KC spreads softened as well but not to the extent of the correction we saw in Chgo.
As far as I’m concerned yesterday’s and today’s consolidation/correction effort does not negate the current uptrend. I’ll call it the pause that refreshes. Tomorrow is export sales day; we’ll see if last week’s higher than expected sales report can be repeated. Additionally, we’ll see what’s happening with our export competition.
Daily Support & Resistance for Dec 19th
March Chgo Wheat: $5.40 – $5.66
March KC Wheat: $4.52 – $4.73 (4.82)
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