Wheat Commentary

storck

Wheat – Just My Opinion

December Chgo Wheat closed 33 ¾ cents lower ($7.73 ¾), March 35 cents lower ($7.87 ¼) & May 34 ¾ cents lower ($7.93 ¾)

December KC Wheat closed 35 cents lower ($8.19), March 35 cents lower ($8.22 ¼) & May 33 cents lower ($8.22)

December Mpls Wheat closed 22 ¼ cents lower ($10.20), March 35 ¼ cents lower ($10.10) & May 34 ¼ cents lower ($10.00)

“Risk-off” hits the wheat markets hard on Tuesday. Is it just a coincidence that today was month-end? After Egypt’s record large purchase yesterday the thought is that we won’t see them back in the market for a while. Supposedly they now have 5 months of reserve. The trade continues to mull over Australia’s larger than expected crop. I’m told quality will be an issue going forward with what’s remaining to be harvested (more excessive rain in their forecast).

Cash wheat markets remain quiet for both domestic and export. We saw big deliveries against the Chgo contract but after the nearby spread traded to new contract lows there was a 5 cent bounce going into the close. There were no deliveries against the KC and Mpls markets. Nearby KC spreads ran steady while the flat price selling had the old crop losing to the new crop. The nearby Mpls spread inverted with the lack of deliveries but March and May lost ground to the new crop due to the influx of liquidation. As far as I’m concerned the hard varieties should maintain a bullish bias in their respective spreads.

Since last Wednesday March Chgo wheat has now broken 92 cents (high to low). The March KC contract has broken 77 cents. Needless to say the short term inter-day charts read heavily oversold. We could easily do some bouncing after this break in both markets (emphasis on bouncing). Daily charts are just getting going with their bearish look. I do feel that both Chgo and KC are coming into previous support levels. It’s my idea that our wheat markets are ripe for some backing and filling of the current break.

Daily Support & Resistance – 12/01

March Chgo Wheat: $7.75 – $8.08

March KC Wheat: $8.11 – $8.45

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