July Chgo Wheat closed 2 ¼ cents lower ($5.04 ½), Sept 2 ½ cents lower ($5.08) & Dec 2 ½ cents lower ($5.17 ¼)
July KC Wheat closed 4 ½ cents higher ($4.51 ¾), Sept 4 ¼ cents higher ($4.58 ¼) & Dec 4 cents higher ($4.70)
July Mpls Wheat closed 4 ½ cents lower ($5.13 ¼), Sept 4 ¼ cents lower ($5.24 ½) & Dec 3 ¾ cents lower ($5.37 ¾)
July Chgo wheat edges down to suspected support, $5.00. July KC wheat continues to consolidate between $4.40 and the low $4.50’s. July Mpls wheat remains a consolidating affair as well. The biggest standout feature of today’s trade was inter-market spread trade. KC gaining on Chgo while the Mpls market got back on the short end of the spreads due to the idea the spring wheat crop will indeed get planted albeit late. I don’t see a lot of export news involving US origin. Weather continues to improve for the Black Sea and Southern Russia while western Europe continues to show a dry bias. Harvest is right around the corner for the US southern Plains. The question now is how much of a reduction in HRW production will the USDA show on June 11th and whether or not demand adjustments will offset.
Interior basis levels for standard protein wheat remain unchanged. The export basis for HRW is also unchanged while the export basis for SRW eases. Wheat spreads don’t so much in Chgo, July loses a ¼ cent to Sept forward. KC spreads showed a fractional bullish bias going forward.
The price action in the wheat charts whether its KC, Chgo or Mpls is trying to suggest the potential for a bottom. The inability to follow through in either direction is my basis for this idea. As we move closer to the June 11th production update its not only US data that will hold sway but also the world data. Since the last report we have seen downward adjustments to our export competition’s crop sizes. In the near term I would be content to fade short term extremes that favor the downside.
Daily Support & Resistance – 5/28
July Chgo Wheat: $5.00 – $5.15
July KC Wheat: $4.45 – $4.60
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