July Chgo Wheat closed 3 ¾ cents higher ($4.85), Sept 4 ¼ cents higher ($4.89 ½) & Dec 3 ¾ cents higher ($4.98)
July KC Wheat closed 3 cents higher ($4.31 ¼), Sept 3 ½ cents higher ($4.39 ¾) & Dec 3 ¼ cents higher ($4.53)
July Mpls Wheat closed 5 ½ cents lower ($5.18 ¾), Sept 6 ½ cents lower ($5.28 ½) & Dec 6 ¼ cents lower ($5.39 ¾)
Weekly Wheat Export Inspections – 613.0 K T. vs. 400-600 K T. expected
USDA says US winter wheat crop now rated 52% GE (+2%) vs. 50% expected vs. 61% year ago – Harvested – 29% vs. 30% expected vs. 26% 5-year average
USDA says US spring wheat crop now rated 75% GE (-6%) vs. 80% expected vs. 75% year ago
A sharply lower US Dollar, strong looking weekly export inspections (based on expectations), some inter-market spread re-alignment and some outright bottom picking from last week’s lows all worked together to support prices on Monday. The most notable bearish news on the day came out of a Russian consulting agency citing a higher crop size by 1.5 M T. to 79.5 M T. To date I’ve now seen Russian wheat crop sizes ranging from 77.0 to 83.0 M T. Last year’s Russian wheat crop was 73.6 M T. according to the USDA.
The interior SRW basis continues to run unchanged with no real bias one way or the other. The Gulf basis for SRW drops 10 cents over the weekend. July Chgo loses to Sept while Sept forward shows a friendly bias. The interior HRW basis continues to be on the defensive while its export basis continues to show a firm tone. July KC loses to the Sept while Sept gains on its forward contracts.
The $64 K question – are US wheat futures in the process of establishing their harvest lows? We’ll know more to that question next Tuesday in the form of deliveries (or lack thereof) as well as the updated acreage report. For the time being the market is deserving of a technical bounce considering July Chgo futures broke 50 cents this month and July KC a near 50 cents. A 50% retracement of the break is not unrealistic.
Daily Support & Resistance – 6/23
July Chgo Wheat: $4.78 – $4.90
July KC Wheat: $4.27 – $4.38
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.