December Chgo Wheat closed 2 ½ cents higher ($7.97), March 2 ½ cents higher ($8.06 ¼) & May 1 ¾ cents higher ($8.11 ¼)
December KC Wheat closed ½ cent lower ($8.21 ½), March 1 ¾ cents lower ($8.22 ½) & May ½ cent lower ($8.24 ¼)
December Mpls Wheat closed 5 ¼ cents higher ($10.41 ½), March 7 cents higher ($10.27 ¾) & May 7 cents higher ($10.15 ¾)
Weekly Wheat Export Inspections – 245.9 K T. vs. 150-400 K T. expected
Flat price wheat continues to see a fair amount of volatility. Sunday night March Chgo wheat trades 8 cents higher only to see the early portion of the Monday session trade as much as 15 cents lower. The balance of the session was spent trying to retrace the 23 cent break in Chgo. Both KC and Mpls saw similar price action. I think the break came from Saudi Arabia buying wheat for July delivery which would suggest at least some of it being new crop. Their tender was for 535 K T.; they wound up buying 689 K T. I continue to hear a fair amount of discussion around Russia export quotas for the final quarter of their marketing year. Right now the trade suspects something close to 9.0 M T. which is a lot better than the 5.0 M T. that was rumored earlier last week. I thought weekly export inspections were no big deal despite them being within the realm of expectations.
Not much happens with the interior SRW basis for standard protein. Its export basis, however, has been firming. The Kansas basis for HRW runs steady to firm while its export basis is fully steady. Chgo spreads run steady to easier within the current crop year while old crop is a near noticeable loser to the new crop. Similar spread action was seen in the KC market (old crop losing to the new crop).
The price action as well as the spread action (both inter-market and intra-market) suggests to me that the flat price wheat is still in a correctional mode. Yes, the flat price rallied smartly off of the early morning lows and that tells me wheat prices still have some great upside potential. The near term, however, could be a jerky trading affair with a liquidating bias.
Daily Support & Resistance – 12/07
March Chgo Wheat: $7.95 – $8.25
March KC Wheat: $8.15 – $8.40
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.