May Chgo Wheat closed 5 cents higher ($4.62 ¾), July 4 ½ cents higher ($4.68) & Dec 5 ¼ cents higher ($4.90)
May KC Wheat closed 4 ½ cents higher ($4.34 ½), July 4 ½ cents higher ($4.42 ¼) & Dec 3 ¾ cents higher ($4.73 ½)
May Mpls Wheat closed 1 ¾ cents lower ($5.53), July ¾ cent lower ($5.56 ¼), & Dec 1 ¼ cents higher ($5.75 ¼)
Weekly Wheat Export Inspections – 418.4 K T. vs. 300-500 K T. expected – Cumulative 18.814 M T. vs. 19.925 M T. year ago – Target 26.26 M T.
US Winter Wheat Ratings – 56% GE vs. 55% expected
As far as I’m concerned last Friday’s Stocks figure from the USDA was no big deal as we have known all along wheat disappearance was slower vs. what had been previously outlined. The bigger deal, I think, was the lower than expected wheat acreage. This opens the door for the possibility of higher prices if the growing season goes awry not only in the US but also with our export competition. As we move forward I have to think wheat prices will minimally stand in until we have a better handle on crop size; not only in this country but from abroad as well. Right now the thought is the US HRW crop is in good shape while the US SRW crop leaves a lot to be desired. I doubt we have planted much HRS yet and given current forecasts I have to think it could become a problematic situation.
The interior wheat basis sees SRW steady to easier while the HRW runs steady. Gulf values run mostly steady for HRW while SRW eases. Chgo spreads had a friendly bias upfront but loses to its deferreds. KC ran steady upfront while gaining on its deferreds.
Short covering supports the Chgo and KC markets while Mpls languishes. I’m not sure how to read that given the lower than expected spring wheat acreage figure form the USDA on Friday. Today’s rally fell just shy of challenging the minor resistance that was set up with last week’s trade. Daily momentum indicators are still suggesting a southerly bias. $4.75 to $4.80 should be viewed as a formidable resistance levels for July Chgo wheat. $4.50 to $4.55 should prove to be the same for July KC. As of this writing a trading range atmosphere is being advertised. With that said watch your shorter term inter-day charts for buying and selling opportunities as we fade short term extremes.
Daily Support & Resistance for 04/02
July Chgo Wheat: $4.58 – $4.78
July KC Wheat: $4.35 – $4.52
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.