Sept Chgo Wheat closed 15 ¼ cents lower ($4.87 ¼), Dec 14 ½ cents lower ($4.99) & March 13 ¾ cents lower ($5.11 ½)
Sept KC Wheat closed 10 ¾ cents lower ($4.29 ¼), Dec 11 ¼ cents lower ($4.48 ½) & March 11 ½ cents lower ($4.67 ¾)
Sept Mpls Wheat closed 8 cents lower ($5.21 ¼), Dec 7 ½ cents lower ($5.35) & March 6 ½ cents lower ($5.50)
Weekly Wheat Export Inspections – 433.1 K T. vs. 350-550 K T. expected
Weekly Winter Wheat Progress – Harvested – 69% vs. 73% expected vs. 79% 5-year average
Weekly Spring Wheat Crop Condition & Progress – 76% GE vs. 76% expected vs. 79% year ago – Headed – 92% vs. 94% 5-year average
The biggest Friday to Sunday night bull trap occurred here. On Friday Sept Chgo wheat traded up to $5.16 ¾ (+23 ¼ cents). Today Sept wheat traded down to $4.87; a near 30 cent range from Friday’s high to today’s low. Despite another lowering of the Russian crop down to 76.1 M T. vs. 77.4 M T. last week the northern hemisphere harvest pressure continues to dictate the wheat market’s overall lower direction. The Ukraine what crop appears to be edging higher as is the US crop. The EU crop remains above year ago levels despite some minor down turns. Wheat export inspections were middle of the road based on expectations. Granted shipments are ahead of last year’s pace I’m told these sales were made much earlier. Recent sales have been no big deal.
The interior wheat basis levels are mostly steady with recent postings. The Gulf basis, however, reads noticeably lower for HRW and is easing for SRW. Chgo spreads lost ground with the flat price selling which seems to be the norm as spreads here tend to follow the flat price movement. In KC Sept gained on Dec while the Dec forward spreads ran mostly unchanged. Winter wheat harvest in the US should be reaching the 75% mark with most of the HRW almost done.
Wheat futures’ charts are nothing short of ugly looking. Unfortunately I will not chase the break. Look what would have happened to you if you chased last Thursday’s break. Sure, if you were able to withstand nearly 30 cents against you today’s result would have you as a slight winner. My question is “who wants to sit through 30 cents against you”. I’ll admit the price action does not offer much in the way of support but the wheat market is infamous for frustration if one chooses to chase interim extremes. With that said I’ll wait for some price action I can lean against rather than grasping at straws.
Daily Support & Resistance for 07/23
Sept Chgo Wheat: $4.85 (?) – $4.98
Sept KC Wheat: $4.25 (?) – $4.38
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.