July Chgo Wheat closed 8 ¾ cents higher ($4.98 ¾), Sept 7 cents higher ($4.98 ¾) & Dec 7 cents higher ($5.06)
July KC Wheat closed 7 cents higher (4.42 ½), Sept 3 cents higher ($4.42 ¾) & Dec 3 cents higher ($4.55)
July Mpls Wheat closed 2 cents lower ($5.07 ¼), Sept 2 ¾ cents lower ($5.17 ½) & Dec 3 ¼ cents lower ($5.30 ¼)
Weekly Wheat Export Sales – old crop vs. 250-600 K T. expected – new crop vs. none expected
Chgo wheat rides the coattails of the strength in the corn and soy markets. KC not so much and Mpls actually went the other way. Chgo is the favorite wheat market of the speculator so its volatility tends to be greater. The KC market has much more conservative participants while the Mpls market, more times than not, trades in its own little world. The numbers we saw from the USDA yesterday are almost moot. The slight decline in acreage is offset by the higher old crop carryout/new crop carryin. So unless new crop yields drop noticeably to create a shortage (which I’m doubting at this point in time) I have to think US wheat prices will go back to being a follower of what’s happening in the global wheat markets. In the near term the Chgo wheat market will be biased to follow the strength in corn and beans but once those markets start to show signs of faltering this market will be the first to move lower. As of this writing Chgo wheat is becoming the recipient of the short side on inter-market grain spreads.
Interior cash wheat markets don’t do a whole lot. Export markets don’t do a whole lot. Chgo spreads are showing a bit of bullish bias but that’s tied to the spec buying. KC spreads firm fractionally but as of this writing seem to be fairly well subdued.
Okay – Chgo wheat is a crowd follower. As long as the other AG markets are working higher wheat will too but to a much lesser extent. The price action in Sept Chgo wheat still looks like it can see what the $5.10 – $5.20 looks like. KC wheat still has the potential to check out the mid-$4.60’s. I don’t think one needs to chase the bulges as intra-day dips will occur such as we saw today.
Daily Support & Resistance – 7/02
Sept Chgo Wheat: $4.92 – $5.10
Sept KC Wheat: $4.35 – $4.54
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