July Chgo Wheat closed 7 ¾ cents lower ($6.80), Sept 6 cents lower ($6.86 ½) & Dec 5 ¼ cents lower ($6.94 ½)
July KC Wheat closed 6 ½ cents lower ($6.30), Sept 5 ¾ cents lower ($6.38) & Dec 6 ½ cents lower ($6.48 ¾)
July Mpls Wheat closed 27 ¾ cents lower ($7.85), Sept 27 ½ cents lower ($7.88 ¼) & Dec 26 ½ cents lower ($7.85)
Weekly Wheat Export Inspections – 418.5 K T. vs. 230-450 K T. expected
Mpls wheat takes Chgo and KC higher Sunday night and then takes them down during the day session. Most of the weather maps feature “ridging” over the western Midwest. What ever moisture that comes out of the far west will have to go over the top of that ridge. So what’s over the top of that ridge – the Canadian prairies. The prairies saw their first bit of rainfall this weekend and from what I read more may be on hand later this week. The northern reaches of N. Dakota saw some of that rain this weekend and may see some additional later this week. It was this rain in the prairies that prompted the Mpls market go from 30 cents higher to 35 cents lower. KC and Chgo followed accordingly but to a much lesser extent with the rally and the ensuing break. Winter wheat is expected to start in earnest this month. The big question is whether or not the winter crop is large enough to offset the probable shortfall in the spring crop. On Thursday the USDA will update winter wheat production. There will not be a spring wheat production figure until August. Total wheat production figures will be eyeballed to see if the USDA is recognizing a possibly shortfall in spring production.
The USDA is suggesting the US winter wheat crop is 2% harvested. Trade expectations ranged from 2% harvested to 15% harvested. This compares to 6% one year ago. The USDA says the condition of the winter wheat is 50% GE. This compares to 48% GE last week. Trade expectations ranged from 46% GE to 49% GE. The USDA goes on to say the spring wheat crop is now rated 38% GE vs. 43% GE last week. Trade ideas ranged from 35% GE to 42% GE.
For as disappointing as today’s session was for the bullishly inclined I don’t think the attempts to move higher are over. From a technical point of view we have a fair amount of support over the market just like we have a fair amount of technical resistance over the market. For the time being my approach would be to fade, not chase, inter-day extremes.
Daily Support & Resistance – 06/08
July Chgo Wheat: $6.70 – $7.00
July KC Wheat: $6.20 – $6.50
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