Dec Chgo Wheat closed 13 ¼ cents higher ($5.90 ¼), March 13 ¼ cents higher ($5.96 ½), & July 11 ¼ cents higher ($5.95)
Dec KC Wheat closed 12 ½ cents higher ($5.62 ¾), March 12 ½ cents higher ($5.63 ½) & July 12 cents higher ($5.70 ¼)
Dec Mpls Wheat closed 6 ¼ cents higher ($5.48), March 7 cents higher ($5.62 ½) & July 7 ½ cents higher ($5.78 ¾)
Weekly Wheat Export Sales – 616.5 K T. old crop vs. 200-550 K T. expected – no new crop vs. none expected
USDA Supply-Demand – US wheat carryout comes down 15 M bu. due imports being cut 5 M bu. and exports hiked 10 M bu. – World wheat carryout comes down 3.95 M T. as total global usage is increased by 5.1 M T. offsetting a production increase of 1.28 M T.
US Wheat Stocks-to-Usage – 40.81% vs. 41.72% last month
Based on expectations we did see a bullish wheat report. My question is “was it bullish enough to justify the recent 30 cent rally?” My initial response is “no, it was not”. What’s behind the rally is the fear that Russia may enact export quotas and/or export tariffs for the remainder of their marketing year. Whenever the trade hears Russia or China the trade tends to go gaga. How long we trade these fears remains to be seen. Adding to the day’s rally was inter-market spreading – buying wheat vs. selling soybeans and corn.
Interior cash wheat markets remain quiet. This holds true for the export markets as well. Chgo spreads firmed with the flat price buying. KC spreads only firmed fractionally.
The recent two-day rally has set up the Chgo wheat charts to give the resistance that was set up in November a serious challenge. The KC market is already halfway through churning that same resistance. Short term inter-day charts are developing a modest degree of overbought. Daily momentum charts are trying to suggest a longer term rally may just be getting underway. What to do – what to do. I’ll trying to fade the shorter term extreme for a short term trade. Chasing rallies is not my forte.
Daily Support & Resistance – 12/11
March Chgo Wheat: $5.88 – $6.05
March KC Wheat: $5.52 – $5.71
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.