May Chgo Wheat closed 2 ¾ cents higher ($5.24 ¼), July 3 cents higher ($5.19 ½) & Dec 1 ¼ cents higher ($5.30 ¼)
May KC Wheat closed 1 ¾ cents higher ($4.83 ¾), July 4 cents higher ($4.87) & Dec 4 ½ cents higher ($5.04 ½)
May Mpls Wheat closed unchanged ($4.98 ¼), July 1 ½ cents higher ($5.08 ¼) & Dec 2 cents higher ($5.33 ¼)
Weekly Wheat Export Inspections – 535.6 K T. vs. 400-650 K T. expected
The USDA reports the US winter wheat crop is now rated 55% GE (+1%) vs. 64% year ago. Expectations were to see 53% GE
The USDA reports that 29% of the intended spring wheat has been planted vs. 43% 5-year average. Expectations were to see 30% planted
Chgo wheat once again challenges suspected interim support levels and those levels continue to hold. The initial softer price action was in response to better growing conditions in the EU and forecasts for beneficial moisture for the US winter wheat areas as well as for the Russian wheat areas. The bigger question is whether or not these rains come too late to stop yield loss. Underscoring today’s rally is the fact that Russia will not be accepting any new contracts for old crop as well as the idea of lower new crop global production due to reduced acres in the EU and in the US.
Advertised basis levels for standard protein wheat run unchanged to what appears to be a shade better (Burns Harbor). I’m not seeing any changes with the export basis. Spreads involving long July had a bullish bias due to the spec buying on the day. Sept forward spreads ran steady to easier. KC spreads showed a fractional bearish bias despite the spec buying.
Granted Chgo continues to lose to KC neither market acts like it is ready to sustain lower prices vs. what we have seen in recent days. I have to think the development of the new crop will go far in determining whether or not we have room for lower prices. Next Monday the USDA will give us its first look at new crop production. Right now I’m looking at an unchanged old crop carryout and a lower new crop carryout. World numbers could be a major factor given the idea of lower EU acres and whether or not yield has been impacted not only there but in the Black Sea area.
Daily Support & Resistance – 5/01
July Chgo Wheat – $5.10 – $5.31
July KC Wheat – $4.80 – $4.96
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