Dec Chgo Wheat closed 7 cents lower ($6.22 ¾), March 7 ½ cents lower ($6.23 ¾), & July 8 cents higher ($6.13)
Dec KC Wheat closed 9 ½ cents lower ($5.60 ¼), March 9 cents lower ($5.68) & July 8 ½ cents lower ($5.77 ¾)
Dec Mpls Wheat closed 8 cents lower ($5.74 ½), March 8 ½ cents lower ($5.82 ¾) & July 7 ½ cents lower ($5.92 ¼)
Weekly Wheat Export Sales – 367.5 K T. old crop vs. 200-800 K T. expected – no new crop vs. none expected
USDA announces Wheat Sales – 130.0 K T. white wheat sold to S. Korea
Egypt announces an overnight tender for optional origin wheat
Despite a fair amount of world wheat business happening US futures sagged on Thursday. Unfortunately the fair amount of world wheat business is not coming to the US as evidenced by today’s ho-hum weekly export sales. I’m hearing China feeders are starting to look at feed wheat in their rations due to their high priced corn. Low grade wheat should not be a problem for them to source. I find it interesting Egypt’s announces a tender after today’s minor sell off. This makes me think that they feel wheat will be harder to source at “reasonable” prices. The concerns over the winter wheat crops in the US (HRW) and in Russia due to dry conditions remain very real. Argentina earlier today lowered they wheat crop again now to 16.8 M T. Earlier this month the USDA suggested 18.5 M T. My bottom line to all of the aforementioned is that wheat prices are due for a correction from a technical standpoint but I’m not sure we are looking at a top.
Advertised basis levels for standard protein wheat continue to see little to no change. This holds true for basis levels at the Gulf. Despite the lower flat price in Chgo spreads saw a minor tightening bias. KC spreads eased with the flat price selling.
Wheat charts appear ready to move into a corrective phase. I don’t think it would take much to see Dec Chgo move down towards the $6.00 level. A similar move for the Dec KC contract would suggest something down towards the $5.40 level. The best case scenario for the near term would be simple consolidation with a slight bias to the downside.
Daily Support & Resistance – 10/23
Dec Chgo Wheat: $6.14 – $6.28
Dec KC Wheat: $5.50 – $5.68
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