July Chgo Wheat closed 5 ¾ cents lower ($6.56 ½), Sept 5 ¾ cents lower ($6.60), & Dec 4 ¾ cents lower ($6.66)
July KC Wheat closed 10 ¾ cents lower ($6.04 ½), Sept 11 ¼ cents lower ($6.11 ½) & Dec 11 cents lower ($6.21 ¼)
July Mpls Wheat closed 2 cents lower ($6.82 ¾), Sept 2 cents lower ($6.89 ½) & Dec 1 ½ cents lower ($6.96 ¾)
The KC wheat market continues to be the weak sister as it is most tied to corn market from a feed stand point as well as the developing crop in the US central southern Plains also weighs on the market. The Mpls market almost finished higher on the day after being down almost 10 cents on the day. Chgo gets caught in the middle as it trades down 15 cents with the corn market but manages to finish only 5-6 cents lower influenced by the Mpls market. If forecasts (staying dry) and crop conditions are any indication of future direction I can’t imagine there is much downside left of the spring wheat market. If true Chgo wheat should be able to at least steady up while KC will continue to be the weak sister.
It looks like someone in Wichita is getting antsy for harvest to start as their basis shows some slight improvement. Basis levels elsewhere are just steady. The export basis is not showing a bias one way or the other. Spreads in Chgo were steady upfront while widening going forward. KC spreads ran fractionally mixed.
Despite the ugliness of the corn market and its influence over the wheat market I cannot bring my self to sell the current levels of flat price wheat. I’m not sure there is a lot of bounce potential here because of that influence but given the magnitude of the current decline and where the price is in respect to technical looking support I cannot sell wheat at its current levels.
Daily Support & Resistance – 05/26
July Chgo Wheat: $6.50 – $6.70
July KC Wheat: $5.95 – $6.20
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.