Dec Chgo Wheat closed 28 ½ cents higher ($5.78), March 27 ¼ cents higher ($5.83 ¾) & July 21 cents higher ($5.82)
Dec KC Wheat closed 33 ¾ cents higher ($5.09 ¾), March 32 ¼ cents higher ($5.18 ¼) & July 29 ½ cents higher ($5.30 ¼)
Dec Mpls Wheat closed 14 ½ cents higher ($5.39), March 14 ¼ cents higher ($5.51 ½) & July 11 ¾ cents higher ($5.67 ½)
Weekly Wheat Export Sales – old crop vs. 200-500 K T. expected – new crop vs. none expected
Quarterly Wheat Stocks – 2.159 billion bu. vs. 2.242 billion expected
2020/21 US Wheat Production – 1.826 billion bu. vs. 1.841 expected vs. 1.838 August USDA – All Winter – 1.171 billion bu. vs. 1.198 expected vs. 1.198 August USDA – HRW – 659 million bu. vs. 696 expected vs. 695 August USDA – SRW – 266 million bu. vs. 276 expected vs. 277 August USDA – White Winter – 246 million bu. vs. 227 expected vs. 226 August USDA – Spring – 586 million bu. vs. 577 expected vs. 577 August USDA
Not to be left out of the fray the wheat market has its own set of fireworks with a much lower than expected quarterly stocks figure as well as a lower than anticipated production figure. The day started strong in the overnight as focus returned to dryness in the different winter wheat regions of the World. It is my thought the lower than expected data is a result of better exports as well as better than expected feed wheat demand. This data sparked one of the biggest one day rallies that I can recall. Now that we have a tightening scenario in the US it tends to offset the larger Russian crop from this past season. It will also place more focus on the dry winter wheat sowing conditions in this country as well as locations overseas (Ukraine & southern Russia). The problems that Argentina has been having (dryness, frost) will also get a greater focus.
Interior cash wheat markets don’t do a whole lot. I have to wonder if today’s rally will prompt the HRW producer to take some time off from planting and do some marketing. The export basis for SRW doesn’t do much while the export basis for HRW continues to suggest a firm bias. Spreads in both Chgo and KC tightened noticeably in response to the big fund buying.
In the last few days I had expressed some doubt as to where the wheat market is going. Today’s knee-jerk higher makes the picture a bit clearer. The bias will be for higher prices as long as we have questions around the winter wheat sowings. Today’s rally should have some backing and filling while halfway back of today’s trading range should provide some support. Given today’s production numbers’ breakdown I think KC should continue to gain on Chgo. As always try and refrain from chasing the short term extreme moves such as we saw today. Look for a few days of trading inside of today’s daily range.
Daily Support & Resistance – 10/01
Dec Chgo Wheat: $5.70 – $5.90
Dec KC Wheat: $5.00 – $5.20
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