July Chgo Wheat closed 9 ¼ cents lower ($5.22 ¼), Sept 8 ¾ cents lower ($5.26 ¾) & Dec 10 ¾ cents lower ($5.36)
July KC Wheat closed 7 ¾ cents lower ($4.57 ½), Sept 9 cents lower ($4.68) & Dec 9 ¼ cents lower ($4.90)
July Mpls Wheat closed 10 ¾ cents lower ($5.41 ½), Sept 10 ¼ cents lower ($5.48 ½) & Dec 10 ¼ cents lower ($5.61)
Egypt announces an overnight tender for optional origin wheat – overnight Egypt buys 290.0 K T. – 110.0 K T. Russian, 180.0 K T. Romanian – Once again US wheat was not offered
Weekly Wheat Export Sales – old crop vs. 200-500 K T. expected – new crop vs. none expected
Flat price wheat continues to retrace/liquidate from recent highs. Ideas that harvesting weather will improve for the HRW areas coupled with a lack of demand have recent buyers on the run. Once again the lack of offers at the Egyptian tender highlight the fact of just high-priced US wheat is vs. its global competitors. For those that are trying to be friendly to Chgo based on the idea the SRW crop is of poor quality that is more of a spread play vs. a flat price play. If the SRW crop is downgraded to feed quality one could see a play for deliveries but it really doesn’t help the flat price.
Not much happens with the interior cash wheat basis. The Gulf basis for HRW stands in while the Gulf basis for SRW appears to be easing. Chgo spreads continue to show a bullish bias based on the quality issue. KC spreads appear in similar fashion. How much of the nearby spread strength is tied to Friday’s option expiration vs. quality deliveries remains to be seen.
Short term inter-day charts are reading rather low given the recent 2 ½ day sell-off. This suggests patience when trying to sell as daily charts are suggesting the sell signal of late is just getting underway. Once again I stress paying attention to the shorter term intra-day and inter-day charts when instituting new positions. Most of the intra-day trading is dominated by the trading funds and they make their moves basis on technical scenarios. IN other words selling the hole could be rather frustrating in the short term just like chasing rallies of a similar sort.
Daily Support & Resistance for 06/20
July Chgo Wheat: $5.15 – $5.30
July KC Wheat: $4.55- $4.73
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.