December Chgo Wheat closed 18 cents lower ($8.07 ½), March 18 cents lower ($8.2 ¼) & May 18 cents lower ($8.28 ½)
December KC Wheat closed 11 cents lower ($8.54), March 11 ¾ cents lower ($8.57 ¼) & May 12 ½ cents lower ($8.55)
December Mpls Wheat closed 2 ¾ cents higher ($10.42 ¼), March 3 ¼ cents lower ($10.45 ¼) & May 5 cents lower ($10.34 ¼)
Weekly Wheat Export Inspections – 250.6 K T. vs. 175-400 K T. expected
Weekly Winter Wheat Condition & Progress – 44% GE (unch) vs. 43% expected vs. 46% year ago; 33% Fair (-1%) vs. 36% year ago; 23% P-VP (+1%) vs. 18% year ago – Emerged – 92% vs. 91% ave
The big news of the day was Egypt buying 600 K T. of Russian wheat (240 K T.), Romanian wheat (240 K T.) and Ukraine wheat (120 K T.). It is my belief that this is Egypt’s biggest one time purchase ever. Unfortunately the market’s response was absolutely the opposite of what one might have expected. Before the re-opening Australia announced a record wheat crop; 34.4 M T., 3.0 M T. greater vs. the latest USDA estimates. I guess the recent concerns over possible quality issues fell on deaf ears. Adding to the selling was the renewed strength in the US Dollar, 1st notice day concerns and month end profit taking.
Interior cash wheat markets don’t do much. This holds true for the export markets as well. Chgo spreads stayed wide suggesting deliveries while KC and Mpls spreads tightened suggesting light if any deliveries. The make-up of deliveries will go far in determining the direction of the inter-market spreads going forward. It is my opinion that the “hard” varieties (KC & Mpls) will maintain their strength over Chgo.
The technical look at the Chgo market is not too reassuring looking for the bulls as the Sunday night rally filled the Friday breakdown gap and then prices turned south. The KC and Mpls markets are not as bearish looking but both show room for further downside correction. I have to wonder if Egypt’s big purchase will act as a last hurrah for prices (at least for the near term).
Daily Support & Resistance – 11/30
March Chgo Wheat: $8.10 – $8.40
March KC Wheat: $8.40 – $8.72
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