May Chgo Wheat closed 5 ¾ cents lower ($4.59 ½), July 4 ¾ cents lower ($4.64) & Dec 3 ¼ cents lower ($4.89 ¼)
May KC Wheat closed 4 cents lower ($4.27 ½), July 4 cents lower ($4.35) & Dec 2 cents lower ($4.69 ½)
May Mpls Wheat closed 1 cent lower ($5.23), July ½ cent lower ($5.31 ¼), & Dec ¾ cent lower ($5.55 ¾)
Highlights of USDA Wheat Supply-Demand Report – US – increased carryout 32 million bu. by lowering domestic usage 11 million bu., lowering exports by 20 million bu. – World – increased carryout 5.08 M T. by increasing carryin 2.28 M T., lowering total usage 2.85 M T.
The USDA report was bearish. After the numbers were released we did see some short covering but that rally was not sustained. My rationale for the price action is that our competition is looking pretty good with their winter crop and with their spring crop. Yes, we have some problems here. It could be sometime before we get the lion’s share of our spring crop planted. Many areas of the SRW winter wheat are not in very good condition. Offsetting some of these woes is the good condition, the best in many years, of our HRW winter crop. Yield potential could go far in offsetting the lower acres.
No changes are being noted in the advertised standard SRW protein cash market. The Gulf for SRW appears to be a bit easier. Standard protein HRW cash is looking a bit better. The Gulf for HRW is fully steady. Chgo spreads sagged with the flat price selling as did the KC market. The bear spreads here are suggesting plenty of old crop within an unknown around the new crop.
The break today in the flat price challenged suggested interim support levels and so far has held. What is a little bit unsettling is the rally out of the hole failed to hold. Closes below $4.59 (July Chgo) will suggest something closer to $4.50. July KC needs a close above $4.50 to steady things up. We’re not far from contract lows in KC and the price action so far leaves a lot to be desired. My bias for trading wheat, KC or Chgo, is to fade inter-day extremes for short term trading opportunities.
Daily Support & Resistance for 04/10
July Chgo Wheat: $4.59 (?) – $4.75
July KC Wheat: $4.28 (?) – $4.42
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.