December Chgo Wheat closed 2 ¼ cents higher ($7.36 ¼), March 2 ¼ cents higher ($7.48 ¾) & May 2 ¼ cents higher ($7.52 ½)
December KC Wheat closed 5 ¼ cents higher ($7.49), March 5 ¼ cents higher ($7.56) & May 5 cents higher ($7.58 ¾)
December Mpls Wheat closed 1 cent lower ($9.67 ¾), March 2 ¼ cents lower ($9.55) & May 1 ¾ cents lower ($9.38)
Weekly Wheat Export Inspections – 139.7 K T. vs. 300-550 K T. expected
Weekly Winter Wheat Progress – Planted – 70% vs. 73% expected vs. 71% ave – Emerged – 44% vs. 47% ave
Global demand for wheat continues. After passing on a tender last week Pakistan is back in the market. Ethiopia has also announced a tender. Despite global demand continuing US origin continues to come up short as evidenced by today’s meager export inspections. Given all of this US wheat futures gave us mixed price action on Monday. Mpls was a shade easier, Chgo slightly better and KC modestly higher. The rumor mill has China back in the world market most noticeably for French origin. Late last week there was some rumoring China might be interested in some US origin but so far nothing in regards to confirmation. It does seem China is trying to drive their own wheat prices lower given the recent 1.0 M T. auction out of their reserves.
Not much happens with the interior wheat basis levels whether its for HRW or SRW. If I had to delineate between the two HRW has a firmer edge vs. SRW. Chgo intra-market spreads have had a bias to widen while KC intra-market spreads have been mostly steady. One spread that is strong is the inter-market spread, Dec KC vs. Dec Chgo. For the past two days KC has been widening its inverse against Chgo.
Despite today’s relatively quiet consolidating type trade the prior week and a half of price action (downflags) still suggests higher prices for both KC and Chgo. US dprices will continue to take their lead from overseas as that is where all of the action is. For what it is worth European wheat futures pumped out new contract highs today only to close lower. With that said the focus is buying breaks to support not chasing rallies to resistance.
Daily Support & Resistance – 10/19
Dec Chgo Wheat: $7.25 – $7.45
Dec KC Wheat: $7.38 – $7.61
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.