Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 2 ¾ cents higher ($5.24 ¼), May ½ cent higher ($5.18 ¾) & July unchanged ($5.19 ½)

March KC Wheat closed 7 cents lower ($4.39 ¼), May 7 cents lower ($4.46 ¼) & July 6 ½ cents lower ($4.53 ½)

March Mpls Wheat closed 9 ¾ cents lower ($5.06 ¼), May 7 ¼ cents lower ($5.22) & July 7 cents lower ($5.31 ¾)

Weekly Wheat Export Sales – 542.4 K T. old crop vs. 350-600 K T. expected – 28.0 K T. new crop vs. 25-75 K t. expected

Today’s slump in equity markets acted as a dark cloud over most agricultural commodity markets in the US.

I’m not sure why Chgo wheat tried to go it alone on the upside today other than for technical considerations (recent liquidation, the sharply lower US dollar). Weekly wheat export sales were okay but the vast majority of them were for the “hard” varieties. The KC and Mpls markets went the route of the rest of the Ag sector. New news directly impacting the SRW I could not find other than the thought the SRW areas of the US will once again grapple with the possibility of excessive moisture. It is that scenario last year that created the problems we currently have. I can understand technical considerations as Chgo wheat had been in a liquidation mode in both its flat price and with its positions in the inter-market spreads.  We know US acres are at decades’ lows. Eastern Europe and the Black Sea areas need rain. Acreage in western Europe is too wet.

Interior cash wheat markets remain firm mostly from slow producer selling. This holds true for the Gulf as well. We have yet to see any deliveries against the March Chgo contract while KC deliveries are down to 8 contracts from 9 over the past few days. The nearby spreads remain well supported in Chgo while staying flat in KC.

Flat price wheat charts are trying to realize support but as of this writing I’m not convinced. I do think we can fade another sharp decline of 8-10 cents but I don’t want to get caught trying to play the long side when the price is grinding lower. As of this writing I’m looking at July Chgo against $5.10 and July KC against $4.45 to $4.40.

Daily Support & Resistance – 3/06

July Chgo Wheat – $5.10 – $5.27

July KC Wheat – $4.47 – $4.59

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