May Chgo Wheat closed 3 cents lower ($5.21 ¾), July 2 ¾ cents lower ($5.14 ½) & Dec 2 ¾ cents lower ($5.27 ½)
May KC Wheat closed 12 ½ cents lower ($4.83 ½), July 5 ¾ cents lower ($4.69 ¼) & Dec 5 ¾ cents lower ($4.88 ¼)
May Mpls Wheat closed 2 ½ cents higher ($5.05 ½), July 2 ¼ cents higher ($5.21) & Dec 2 ½ cents higher ($5.43 ¾)
Highlights of the USDA US Supply-Demand Report – Old Crop – increased food usage 7 million bu., lowered exports by 15 million bu., increased carryout 8 million bu. – New Crop (year to year) – lowered production by 54 million bu., increased imports by 35 million bu., lowered domestic usage by 32 million bu., lowered exports by 20 million bu., lowered carryout by 69 million bu.
Highlights of the USDA World Supply-Demand Report – Old Crop – total usage declines by 5 M T., carryout increases by 5 M T. – New Crop (year to year) – carryin increased by 15 M T., production increases 4 M T., usage increases by 5 M T., carryout increases by 15 M T.
The old crop data from the USDA was a non-event. The new crop carryout comes in higher than expected but Chgo futures find support near recent lows. The KC market breaks down through suspected support levels but gives us an inconclusive close. I have to think the pressure we saw was a result of recent beneficial weather for the developing winter crop. The Mpls market was able to shake off the lower prices in the winter crop due to the late planting of the spring crop. Forecasts do suggest improvement will be coming to the spring wheat.
Advertised basis levels for standard protein wheat run unchanged in the US interior. The HRW market at the Gulf is steady but has a soft look to it when compared to where it was last week. The SRW basis at the Gulf rolled to July and it looks to be in line when the basis was off of the May. Both Chgo and KC spreads had a mixed look to them.
Wheat charts have an iffy look to them whereas closes are inconclusive. Chgo held recent support levels while KC’s close suggests it is hanging by a thread. Weather here and abroad going forward will dictate a lot of the near term direction. For the time being I’ll go back to using the MO of fading inter-day extremes for short term trading opportunities.
Daily Support & Resistance – 5/13
July Chgo Wheat – $5.09 – $5.20
July KC Wheat – $4.64 – $4.74
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.