December Chgo Wheat closed 8 cents lower ($7.91 ¼), March 14 cents lower ($7.94 ½) & May 14 cents lower ($7.99 ¼)
December KC Wheat closed 17 cents lower ($8.10 ¼), March 15 ½ cents lower ($8.12) & May 14 ¾ cents lower ($8.13 ¾)
December Mpls Wheat closed 7 ¾ cents higher ($10.53 ½), March 1 ¼ cents lower ($10.35 ¼) & May 1 cent lower ($10.21 ½)
Weekly Wheat Export Sales – old crop vs. 50-400 K T. expected – new crop vs. 0-50 K T. expected
Argentina increase its crop size by 1.7 M T. France lowers its export expectations while Russia appears to have aggressive offers to sell wheat. Global wheat business appears to have slowed down after Egypt bought 600 K T. on Nov 29th and Saudi Arabia buying 600 K T.+ of new crop wheat (July shipment) over the weekend. US wheat sales continue to be unimpressive. Tomorrow the USDA will update the US carryout. The average trade guess has the carryout increasing by 6 M bu. to 589 M bu. The World wheat carryout is expected to climb by 350 K T. to 276.15 M T. Due to all of the aforementioned is the rationale for today’s sell-off in both Chgo and KC. The Mpls market manages to stand in which is reminiscent of the 2007/08 marketing year when prices did not peak until February, early March.
The interior cash wheat basis for SRW is steady as is its export market. Chgo spreads saw the March/May steady. The old crop loses to the new crop. We have a similar cash market scenario for HRW. Spreads in KC leaked wider in the old crop while old crop loses to the new crop.
So; is the USDA going to give us anything that will stem the current run of liquidation in the KC and Chgo markets? Probably not. I’m staying with my technical ideas that March Chgo wheat should be able to realize some pretty good support as it approaches the $7.75-$7.70 level.
Daily Support & Resistance – 12/09
March Chgo Wheat: $7.75 – $8.20
March KC Wheat: $7.90 – $8.35
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