December Chgo Wheat closed 2 ¼ cents higher ($7.99 ¼), March 2 ¼ cents higher ($8.08 ½) & May 2 cents higher ($8.13 ¼)
December KC Wheat closed 5 ¾ cent higher ($8.27 ¼), March 5 cents higher ($8.27 ½) & May 4 ¼ cents higher ($8.28 ½)
December Mpls Wheat closed 4 ¼ cents higher ($10.45 ¾), March 8 ¾ cents higher ($10.36 ½) & May 6 ¾ cents higher ($10.22 ½)
Mpls wheat resumes its upside leadership role on Tuesday with KC following and Chgo bringing up the rear. I did not see any new news to spark today’s rally. In the last couple of days we’ve seen intra-day attempt to break Chgo and KC prices all to no avail. On Thursday the USDA will update supply-demand numbers. Trade ideas have the US wheat carryout increasing by 6 M bu. and the World carryout increasing by 350 K T. Granted the US wheat export program hasn’t been much to write home about but the rally hasn’t been about demand for US wheat. Its been about the demand for our competitors wheat.
The interior basis for SRW runs unchanged with no clear cut direction. The export basis for SRW continues to show a firm tone. Chgo wheat spreads ran fractionally better within the old crop while old crop loses to the new crop. The interior basis for HRW is firm while its export market is fully steady. KC spreads showed a tightening bias even though a lot of HRW daily chatter is about the developing dryness in the southern Plains.
The technical look at wheat prices suggest we are still in a correction/consolidation phase. My bias is to still buy breaks but the price has to come to me; I’m not going to them. I still like the $7.80-$7.75 level for March Chgo wheat and something a bit closer to the $8.00 level for the March KC.
Daily Support & Resistance – 12/08
March Chgo Wheat: $7.95 – $8.20
March KC Wheat: $8.15 – $8.40
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