March Chgo Wheat closed 27 ½ cents higher ($7.96 ½), May 28 ¾ cents higher ($7.99) & July 27 ¾ cents higher ($7.87 ¼)
March KC Wheat closed 27 ¼ cents higher ($8.00), May 28 ¼ cents higher ($8.03 ½) & July 28 ½ cents higher ($8.05 ½)
March Mpls Wheat closed 32 ¾ cents higher ($9.39 ¾), May 30 ¾ cents higher ($9.35 ½) & July 29 ½ cents higher ($9.27 ¼)
It seems the geopolitical issues between Ukraine and Russia have moved to forefront of wheat trading. If it really gets serious and they come to blows both of these countries will be removed from the export world involving wheat and feed grains. Now we add the factors of inflation, the dry US southern Plains and the recent $1.40 – $1.50 break the end result is no one willing to be short.
The advertised basis levels for standard protein wheat run unchanged. Export levels for both varieties (HRW & SRW) are firming. I’m not sure the stronger export levels are about new business or just anticipation of new business. Spreads in Chgo ran mixed following recent firming while KC spreads has March continuing to lose while May forward spreads were unchanged.
So what’s the latest between Ukraine and Russia? They seem to be the primary driving force right now. I do think the two-day 50 cent plus rally is a bit excessive for the near term. Given the 2-month break from mid-November there is room to move higher. Trading conditions have gotten emotional so be careful chasing much further rallies. I’m thinking $8.25 is enough for March Chgo and $8.30 for March KC. I never had much success chasing a rally in the wheat market.
Daily Support & Resistance – 01/20
March Chgo: $7.80 – $8.12
March KC: $7.80 – $8.15
The risk of trading futures and options can be be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.