Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 1 cent lower ($5.61 ½), July ½ cent lower ($5.55 ¼) & Sept ¾ cent higher ($5.56 ½)

May KC Wheat closed 1 ¼ cents higher ($4.90 ¾), July 2 cents higher ($4.95 ¼) & Sept 2 ¾ cents higher ($5.02 ¼)

May Mpls Wheat closed 4 ¾ cents higher ($5.35), July 5 cents higher ($5.43 ½) & Sept 4 ¾ cents higher ($5.51)

Flat price Chgo Wheat goes into a minor correction phase that featured some backing and filling of Monday’s rally. If I didn’t know better the rebound in equities was partially responsible. In recent days fears had been running high that bread shortages may develop due to virus issues. I have to think the rebound in equities eased those fears for the short term. We also saw some profit taking on the inter-market spreads involving long Chgo wheat. Overnight the USDA did cite some improvements in the conditions of the winter wheat crop in the southern Plains as well as the condition of the Arkansas SRW crop. Global wheat business continues to be rather strong. It will be interesting to see just how much the US sees of this run.

Advertised cash wheat prices (basis) run unchanged for standard protein. Premiums are still being paid for higher protein milling quality. Intra-market spreads in all varieties took a breather from their recent bull run. If you’re a believer in higher prices for both spreads and flat price days like today, minor corrections, are healthy for the market.

As the flat price in Chgo and KC approach significant technical resistance levels we saw some of the recent longs bank profits. Today’s performance does not suggest the recent run higher is over. I’m thinking it’s the pause that refreshes. We may see a bit more of this (corrective type price action) in the near term but in the longer term prices still appear to be going higher.

Daily Support & Resistance – 3/25

July Chgo Wheat – $5.45 – $5.70

July KC Wheat – $4.85 – $5.04 ($5.10)

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