March Chgo Wheat closed 14 ¾ cents lower ($7.46), May 15 cents lower ($7.49 ¾) & July 12 ¼ cents lower ($7.48 ¾)
March KC Wheat closed 18 ½ cents lower ($7.68 ½), May 18 cents lower ($7.70 ½) & July 16 ½ cents lower ($7.70 ½)
March Mpls Wheat closed 24 ½ cents lower ($9.23 ¾), May 22 ¾ cents lower ($9.21 ½) & July 20 cents lower ($9.12 ¼)
Weekly Wheat Export Sales – 48.6 K T. old crop vs. 150-400 K T. expected – 2.5 K T. new crop vs. 0-50 K T. expected
Flat price wheat has become everyone’s favorite dumping ground. It’s called the lack of business for US origin. Granted last week’s export sales report was the lowest of the season and most are dismissing it due it being a holiday week the bottom line is that the smart guys were not looking for much to begin with. It seems that as corn and soybeans stay firm these purchases are being hedged by selling wheat. Next Wednesday the USDA will update final production from last season as well as 2nd quarter usage. Needless to say given recent market action the trade is looking for bearish data. The USA will also give us a look at winter wheat acres for the coming season. The idea is that these should increase vs. last year especially in the SRW sector due to the lateness of the grain harvest. Time will tell.
The interior basis for standard protein wheat doesn’t do much. Export levels, however, are improving as the flat price goes down. Spreads, both inter and intra market, in all three varieties are widening reflecting the general liquidation.
It’s hard to think the flat price continues to decline with next Wednesday’s report coming up. Then again markets go higher than what we feel reasonable and in this case go lower vs. what we feel reasonable.
Daily Support & Resistance – 01/07
March Chgo Wheat: $7.40 – $7.55
March KC Wheat: $7.63 – $7.80
The risk of trading and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.