March Chgo Wheat closed 6 ¼ cents lower ($5.13 ¾), May 6 ¼ cents lower ($5.19 ¾) & July 6 ½ cents lower ($5.24 ¼)
March KC Wheat closed 6 ¾ cents lower ($4.98 ¾), May 7 ¼ cents lower ($5.10) & July 7 ½ cents lower ($5.19 ½)
Despite the talk of higher world wheat prices and US FOB wheat prices being the cheapest it still doesn’t get us any business. It was very telling at the Egyptian tender the other day when the US had the lowest FOB offers but did not get any of the business. High freight costs out of the US kept us from being competitive. If high freight costs continue to be an inhibitive to getting additional business it says US FOB offers are not low enough. With that said I have to think US wheat futures will stay range bound favoring the low side of the trading range ($5.00 to $5.50 March Chgo).
Interior cash wheat markets are quiet. The Gulf for SRW is steady and quiet while the HRW Gulf market appears to be a bit easier. Despite the lackluster price performance/demand nearby wheat spreads, both Chgo and KC, continue to tighten. It looks like exchange approved storage facilities will be looking at lower mandated storage charges as long as the nearby carry stays below 50% of full carry.
So, is the New Year rally over? Granted today’s performance was not very spiffy looking I do feel the mid-$5.00’s will hold any further sell off. It continues to be my thought that when trading Chgo wheat or KC wheat short term inter-day technical are the best indicators for trading. It’s called fading these short term extremes.
Daily Support & Resistance for 01/11
Mch Chgo Wheat: $5.08 – $5.20
Mch KC Wheat: $4.92 – $5.06
The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.