Sept Chgo Wheat closed 10 ¼ cents lower ($5.21), Dec 9 ½ cents lower ($5.29 ¼) & March 8 ½ cents lower ($5.37 ¼)
Sept KC Wheat closed 11 ¾ cents lower ($4.30 ¾), Dec 11 ½ cents lower ($4.41 ½) & March 11 ¼ cents lower ($4.52 ½)
Sept Mpls Wheat closed 7 ½ cents lower ($5.06 ½), Dec 7 ½ cents lower ($5.20 ¼) & March 6 ½ cents lower ($5.34 ½)
Weekly Wheat Export Inspections – 500.1 K T. vs. 450-675 K T. expected
Weekly Winter Wheat Ratings –Harvested – 85% vs. 89% expected vs. 88% 5-year average
Weekly Spring Wheat Ratings – 73% GE (+3%) vs. 70% expected vs. 73% year ago – Harvested – 5% vs. 8% expected vs. 10% 5-year average
I’ve often said US wheat futures are a follower of the overseas competition. Today was a great example of that. Russian prices led the way down as another one of their Ag consultancies (IKAR) increased their crop size to 79.5 M T. Early July the USDA pegged the Russian crop at 76.5 M T. If the USDA adopts this new Russian production figure I have to think it will offset whatever reductions we see from the EU. Weekly export inspections were deemed no big deal.
Its not often we see advertised interior basis levels for wheat change. Today’s posting saw two SRW locations drop their basis by 5 cents. The Gulf for SRW stays unchanged. Needless to say the spreads in Chgo had a widening bias not only from the lower basis levels but also from the flat price selling. Advertised basis levels for HRW are unchanged in the interior and a shade better at the Gulf. KC spreads only saw fractional weakness.
Sept Chgo wheat challenges what I believe to be a make it or break support level ($5.17) and so far manages to hold. I don’t think I should be holding my breath as we go forward. Sept KC comes within 2 ½ cents of its June contract low and manages to hold. Dec Mpls wheat registers a new contract low but not a new contract low close. I find it interesting that there is no announced overnight tender from Egypt. Recent losses of today’s magnitude prompted them to tender. It looks like they may have miscalculated on potential export availability.
Maybe I should reassess my view of US wheat futures being a follower of overseas prices. After today it looks like US wheat futures are indeed a leader – a downside leader!!
Daily Support & Resistance – 8/04
Sept Chgo Wheat: $5.15 (?) – $5.30
Sept KC Wheat: $4.23 (?) – $4.37
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.