March Chgo Wheat closed 2 ¾ cents higher ($5.80 ½), May 1 ¾ cents higher ($5.79) & July 2 cents higher ($5.78 ¾)
March KC Wheat closed ¼ cent lower ($4.92 ¼), May unchanged ($4.99 ¾) & July ¼ cent lower ($5.06 ¾)
March Mpls Wheat closed ¼ cent higher ($5.55 ¾), May ½ cent lower ($5.64 ½) & July unchanged ($5.72)
Weekly Wheat Export Sales – old crop vs. 300-700 K T. expected – new crop vs. 0-100 K T. expected
Flat price wheat moves into a correction mode following Wednesday suggested reversal. If I didn’t know better it was overbought that prompted Wednesday’s break. World wheat prices continue to be firm as world business remains fairly active. If I didn’t know better the higher world prices go it drives in additional buyers; something like the market is at its most bullish at the top. The issues behind last year’s SRW crop (poor quality) will not go away until new crop can be had. The HRW market, which is the lion’s share of the US wheat stocks, is looking at a double top against the $5.04 level. All along I had been thinking March KC wheat above $5.00 deserves a second look. That second look suggests we have a correction coming.
Advertised interior basis levels for standard protein wheat don’t change. This holds true for export values as well. Despite the flat price moving into a correction mode bull spreads in Chgo continue to work. If we did not have any deliveries in December why would we have deliveries in March? KC spreads are fairly quiet vs. the Chgo spreads. KC spreads have a much more subdued bullish bias.
As far as I’m concerned wheat prices have seen their highs for the near term. The big question is how much of a correction do we see. As of this writing I’m thinking March Chgo can easily trade down to the $5.60 level and March KC wheat something closer to $4.80-$4.75. I’m reluctant to say wheat prices have topped out as we still have the winter crop in an unknown condition.
Daily Support & Resistance for Jan 24th
March Chgo Wheat: $5.70 – $5.89
March KC Wheat: $4.84 – $4.99
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