March Chgo Wheat closed 3 ¼ cents lower ($5.11), May 3 ¾ cents lower ($5.16) & July 4 cents lower ($5.20 ½)
March KC Wheat closed 3 ½ cents lower ($4.95 ½), May 3 ½ cents lower ($5.06 ¾) & July 2 ¾ cents lower ($5.17)
Despite reports of continued higher Black Sea wheat prices US wheat futures continue on the defensive. Index fund selling was completed on Monday. Futures tried to move higher Monday night but succumbed to the wide spread selling that encompassed the Ag sector during Tuesday’s day session. Sharp strength in the US Dollar added to the day’s negative mentality. In summation I have to think US wheat futures will continue to mirror the mentality that we have been seeing in the rest of the grain sector unless we see some new business come our way.
Interior cash wheat markets remain quiet. Export values appear to easing just a touch for HRW while the SRW is just plain quiet. Chgo spreads did improve a bit despite today’s flat price sell-off which I have to think is in regard to the low numbers of contracts registered for delivery. The KC spreads ease fractionally within the crop year as well as losing to the new crop.
Chgo wheat futures got to the level I’ve been touting for ownership for the past couple of weeks. I’ll admit the current price pattern looks rather ominous but we’ve been there before and the market has failed to follow through. It continues to be my thought that the US wheat futures trade is more short term technically inspired than anything else. I refuse to chase short term extremes.
Daily Support & Resistance for 01/16
Mch Chgo Wheat: $5.05 – $5.18
Mch KC Wheat: $4.90 – $5.03
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.