July Chgo Wheat closed 1 cent higher ($5.39 ½), Sept ¾ cent higher ($5.42 ¾) & Dec ¾ cent higher ($5.54)
July KC Wheat closed ¾ cent lower ($4.75 ½), Sept 1 cent lower ($4.87 ½) & Dec ½ cent lower ($5.09)
July Mpls Wheat closed 3 cents lower ($5.60 ¼), Sept 3 ¾ cents lower ($5.66 ¾) & Dec 2 ¼ cents lower ($5.79)
Weekly Wheat Export Inspections – 375.3 K T. vs. 300-600 K T. expected
Weekly Winter Wheat Progress & Conditions – Condition – 64% GE (unch) vs. 63% expected vs. 39% year ago – Harvested – 8% vs. 14% expected vs. 20% 5-year average – Headed – 89% vs. 95% 5-year average
Weekly Spring Wheat Progress & Conditions – Condition – 77% GE (-4%) vs. 81% expected vs. 78% year ago – Emerged – 95% vs. 97% 5-year average – Headed – 2% vs. 12% 5-year average
If you are bullish wheat you are long Chgo. If you’re bearish wheat you’re short Mpls. KC wheat is caught in the middle of all this. What’s bullish about Chgo wheat is the concern over the quality of the SRW. There’s talk of concern as to some of the quality of the HRW but so far it’s just talk as spreads really aren’t showing it. The HRS crop appears to be good shape. What about the US competition? Canada is getting some timely rain. The Black Sea area sees some moisture leaking in. The EU wheat crop appears to be developing in good shape. Australia is once again cutting its crop size due to its drought entering its third year. US wheat remains noticeably over priced in the World’s export circles. If I didn’t know better emotion is running the Chgo market while KC and Mpls limp along trying to get something going but not doing a very good job of it.
Advertised basis for standard protein wheat run mostly unchanged but showing a firm undertone. Producer sales remain minimal at this point. The HRW basis is looking at harvesting so one is will willing to pay up; at least not yet as the crop looks to be a bit bigger than originally anticipated. The eastern SRW basis has a firm tone due to what appears to be SRW on the verge of becoming “junk status” due to the excessive rainfall. KC spreads have shown some improvement over the past few days but nothing that shouts look at me. Chgo spreads, July/Dec, is the strongest it has been dating back to a year ago May.
$5.50 July Chgo was an interim high back last December. We tapped at that level today and the market was turned back. Other than the quality issue with SRW (which should be a spread play or basis play) I would like to say Chgo wheat prices have gone high enough. Strength in KC and Mpls is nowhere near it is in Chgo. If Chgo starts to break it may give these other two markets some indirect support but not enough to noticeably extend gains. The lack of being competitive in the World’s export circles should be enough to say/ask “why do we need to be long US wheat?”
Daily Support & Resistance for 06/18
July Chgo Wheat: $5.25 ($5.20) – $5.50
July KC Wheat: $4.60 ($4.55) – $4.85
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