Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 2 ¼ cents lower ($5.62 ¼), May 1 ¾ cents lower ($5.64 ¾) & July 1 ½ cents lower ($5.66 ¾)

March KC Wheat closed 2 cents lower ($4.92 ¾), May 1 ¾ cents lower ($5.00 ½) & July 1 ½ cents lower ($5.08 ¼)

March Mpls Wheat closed 3 cents lower ($5.55 ¼), May 2 ¾ cents lower ($5.63 ¾) & July 3 cents lower ($5.70 ¾)

Weekly Wheat Export Inspections – 473.9 K T. vs. 300-500 K T. expected

Egypt announces an overnight tender for optional origin wheat

I thought the USDA winter wheat seedings report was friendly for the “hard” varieties (KC & Mpls) vs. the soft variety (Chgo). Unfortunately no one was willing to push prices beyond Friday’s highs. There is some speculation that once we see the US/China trade accord signed later this week it could get us “some” wheat business. As of this writing I won’t look past “some”. Our export competition is still seeing firm prices. I will suggest the US will continue to take its flat price cue from them.

After the close Bloomberg News runs an article that reads as follows:

Russia’s Agriculture Ministry is proposing to draft a regulation that would temporarily limit the amount of grain for export from Russia outside the Eurasian Economic Union, according to a ministerial posting on a government website.
* The proposal would be put up for a public debate for 15 days
and implemented by the end of the month pending approval by Prime Minister Dmitry Medvedev
* It seeks to ensure food security in the country
* The posting didn’t contain the text of the proposal or any more details
* NOTE: The Eurasian Economic Union is a customs union of five countries including Russia, Kazakhstan, Armenia, Kyrgyzstan and Belarus
* NOTE: In the past, Russia has regulated overseas sales with an export tax, which is currently at zero but can be increased
Advertised interior wheat basis levels for standard protein wheat run unchanged. The Gulf basis for both varieties A couple of HRW interior locations did see some minor easing last week as the flat price was rallying. Premiums for quality SRW continue to be big. Spreads in both KC and Chgo saw some minor easing following Friday’s strength.

On Friday both Chgo March wheat and KC March wheat posted new high closes for the rally that started back in early September. The “however” is that we are also looking at double tops in both markets. Today’s inside day with slightly easier closes does neither confirm or deny the double top. It will be interesting to see how the trade handles the announced overnight Egyptian tender as well as the Russian Ag Ministry proposal. Personally I still see room to run higher as no faction of the price data reads overbought.

Daily Support & Resistance for Jan 14th   

March Chgo Wheat: $5.55 – $5.74 (?)

March KC Wheat: $4.85 – $5.06

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