December Chgo Wheat closed 17 ¾ cents lower ($7.73 ½), March 17 ¾ cents lower ($7.76 ¾) & May 16 ¾ cents lower ($7.82 ½)
December KC Wheat closed 15 ¾ cents lower ($7.94 ½), March 15 ½ cents lower ($7.96 ½) & May 15 ¼ cents lower ($7.98 ½)
December Mpls Wheat closed 15 ¾ cents lower ($10.37 ¾), March 13 cents lower ($10.22 ¼) & May 12 cents lower ($10.09 ½)
Weekly Wheat Export Sales – 239.9 K T. old crop vs. 50-400 K T. expected – no new crop vs. 0-50 K T. expected
Highlights USDA Wheat S&D Report – US – lowered imports 5 M bu., lowered exports 20 M bu., increased carryout 15 M bu. – World – increased total supply 4.30 M T., increased usage 1.93 M T., increased carryout 2.38 M T.
The US wheat carryout comes 16 M Bu. higher vs. ideas of a 6 M bu. increase. The World carryout comes in 2.38 M T. higher vs. ideas of 350 K T. increase. Prices had been under pressure prior to the report and this data pushed prices even lower. Prior to the report March Chgo wheat had been trading 12-14 cents lower. The report pushed prices down another 10 cents or so before trying to rebound. The initial rebound stalled at the levels the market was trading at prior to the report.
Long story short; the wheat report was bearish based on expectations. In the past two weeks we’ve seen March Chgo wheat break $1.04 and March KC break $1.05. Action like this would suggest the report is already priced in the market. The rally this fall and early winter was all about US prices following overseas prices. Global wheat business has slowed down in recent days allowing for the further sell-off. From a technical standpoint I’m thinking there is not much left on this correction. I would like to think the lows we saw today represents the beginning of support. I may be wrong but further weakness beyond what we saw today represents a relatively low risk buying opportunity.
Daily Support & Resistance – 12/10
March Chgo Wheat: $7.68 – $7.91
March KC Wheat: $7.86 – $8.12
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.