May Chgo Wheat closed 7 ½ cents higher ($6.34 ¾), July 7 cents higher ($6.26 ¼) & Sept 5 ½ cents higher ($6.24 ¼)
May KC Wheat closed 3 ¾ cents higher ($5.82), July 4 cents higher ($5.88 ¼) & Sept 4 cents higher ($5.94)
May Mpls Wheat closed 3 ¾ cents higher ($6.29 ¾), July 4 ¾ cents higher ($6.39 ¼) & Sept 3 ¾ cents higher ($6.45 ½)
In the early going May Chgo wheat sets a 2 ½ month low and May KC a near 3 month low. Pressure came from a noticeably higher US Dollar and continued improvement in the HRW crop in the central southern Plains. Within minutes of these new lows a sharp short covering rally ensued. I believe it initially started from oversold considerations and a lack of selling overhead allowed to the rally to accelerate. There was some talk about severe flooding in southeast Australia; severe enough to hamper rail movement. For now I’m willing to say this was just a knee-jerk rally in response to technically oversold.
The interior cash basis for standard protein wheat remains quiet. The same holds true for the Gulf. Chgo spreads had a bullish bias in response to the day’s buying. KC spreads ran steady to fractionally easier which is reflecting the improving HRW crop.
From a technical point of view we’ve probably gone low enough for now. If you want the market to move yet even lower we need to bounce first. I have to think the upside will remain limited in the near term due to a lack of market making business and what appears to be improving crop prospects.
Daily Support & Resistance – 03/24
May Chgo Wheat : $6.28 – $6.42
May KC Wheat: $5.75 – $5.90
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