Sept Chgo Wheat closed 1 ¾ cents lower ($7.60 ½), Dec ¾ cent higher ($7.75) & March 2 cents higher ($7.86)
Sept KC Wheat closed 5 ¾ cents lower ($7.37), Dec 5 ¾ cents lower ($7.49 ¼) & March 5 ½ cents lower ($7.57 ¾)
Sept Mpls Wheat closed 2 ¼ cents lower ($9.42), Dec 2 ½ cents lower ($9.27) & March ¾ cent lower ($9.16 ¼)
Weekly Wheat Export Inspections – 440.5 K T. vs. 300-625 K T. expected
Spring Wheat Condition & Progress – 11% GE (unch) vs. 11% expected vs. % year ago – 63% P-VP (+2%) vs. 6% year ago – Harvested 58% vs. 36% 5-year ave.
Flat price wheat goes into a minor consolidation phase. All three varieties register inside days of Friday’s run to new contract highs. In addition to the flat price consolidation we also saw some inter-market spreading where KC loses to both Mpls and Chgo. Chgo notes some pretty significant bear spreading involving the September contract. The nearby intra-market spreads in Chgo either matched contract lows or made new contract lows. This is not particularly friendly looking when the flat price is at or new contract highs. For what it is worth the nearby spreads in KC remain depressed looking as well. How much of this is liquidation of the Sept ahead of 1st notice day in two weeks remains to be seen. I do know we have seen some pretty decent cash movement as domestic basis levels do have a defensive look. Weekly export inspections were deemed as okay; just shy of the midpoint of expectations.
In the near term the trade will be watching for the results of the Algerian tender as they are known to take rather large amounts vs. the announced 50 K T. tender. Whatever they do will be an indication of world prices and whether or not the importers are willing to live with these prices. I’m told that in recent days respective buyers have been going hand to mouth due to the sharp rise in global prices.
Today’s inside day is not an indicator of a top; just a pause in the rally. Tomorrow’s price action will be a better indicator of the action going forward; a continuation of the rally or the beginning of a correction phase.
Daily Support & Resistance – 08/17
Dec Chgo Wheat: $7.67 ($7.60) – $7.86 (?)
Dec KC Wheat: $7.44 – $7.65
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