May Chgo Wheat closed 31 cents lower ($7.42 ½), July 31 ¼ cents lower ($7.30 ½), & Sept 31 ¼ cents lower ($7.31)
May KC Wheat closed 32 ¼ cents lower ($6.95 ½), July 33 ¼ cents lower ($7.03 ½) & Sept 33 cents lower ($7.07 ½)
May Mpls Wheat closed 43 ¼ cents lower ($7.45 ¾), July 44 ¼ cents lower ($7.53 ¼) & Sept 44 ½ cents lower ($7.58 ¼)
Weekly Wheat Export Inspections – 545.5 K T. vs. 375-600 K T. expected
Flat price wheat gets slammed the hardest of all of the Ags today. It is my opinion its all about the weather. Current weather conditions suggest no harm to the finishing HRW crop. It looks like the dryness in the Northern Plains will soon be getting a respite. The recent fears of dryness in some of the European wheat regions are being laid to rest. All in all it looks like the World is going to have another good wheat crop. I know many that have been playing the long side have been saying wheat has to follow corn as a feed substitute. That may be true but it seems over the weekend some of that rationale has changed – we’ll have more than enough wheat to substitute for feed.
Interior cash wheat markets don’t show me much as basis levels remain pretty steady. There may be some areas that may be feeling some tightness as the old crop winds down. the gulf looks like it may be feeling that.as well as the export basis has been firming. In another month or so that should be alleviated.
As far as I concerned the double tops in both the KC and Chgo markets loom large. Until those double tops fall the wayside I’ll be an advocate of selling 50% retracements of today’s low to Friday’s high. If and when July Chgo takes out the $7.10 level and July KC the $6.80 level it will suggest the bull market is conclusively over.
The trade had been thinking the condition of the US winter wheat crop would stay unchanged (48% GE) vs. last week. Conditions actually improved 1%. Spring wheat planting was thought to be 69% planted. The USDA reports that 70% of the intended crop has been planted vs. the norm of 51% and 40% one year ago.
Daily Support & Resistance – 05/11
July Chgo Wheat: $7.15 – $7.42
July KC Wheat: $6.88 – $7.12
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