March Chgo Wheat expired 8 cents higher ($4.48 ¼), May closed 5 ½ cents higher ($4.52 ¾) & July 4 ½ cents higher ($4.59 ¾)
March KC Wheat expired unchanged ($4.29 ¾), May closed ¼ cent lower ($4.36 ½) & July ½ cent lower ($4.45)
Weekly Wheat Export Sales – 263.0 K T. old crop vs. 400-600 K T. expected – 83.0 K T. new crop vs. 50-150 K T. expected
Continued spec short covering supports flat price wheat for a good portion of the day. Late in the day gains were trimmed due to a lack of follow through buying. Here’s what’s impacting the different varieties – HRW; lots of moisture in these areas – SRW; maybe too much moisture in these areas – HRS; a slow start to spring planting due to excessive snow in the north and excess moisture elsewhere. In the HRW areas the recent moisture has to be deemed as beneficial; moisture elsewhere maybe not so much. My bottomline is I think the spec trade got too bearish too fast and concerns over the SRW crop and the HRS crop prompted the short covering burst. We know it wasn’t about demand as evidenced by the feeble looking export sales. Inclement weather is forecasted to clear out for the next week or so. With that said don’t be surprised to see a pause in the current short covering run.
Interior cash wheat markets are quiet. Not much happens with the SRW export market. The HRW export market appears to be easing with the recent flat price rally. Bull spreads in Chgo are working out to May 2020. Spreads in KC run fractionally mixed on the day with no clear cut direction.
Flat price wheat tries to chew through technical resistance levels and by the end of the day I got the impression the recent burst of short covering may have run its course. The late sell-off is suggesting to me that it’s probably time to reassess recent weather and its impact on the wheat markets going forward. With that said I am expecting to see some additional backing and filling of the recent rally.
Daily Support & Resistance for 03/15
May Chgo Wheat: $4.42 – $4.58
May KC Wheat: $4.25 – $4.42
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.