March Chgo Wheat closed ¼ cent lower ($5.16 ½), May ¾ cent lower ($5.21 ¾) & July 1 cent lower ($5.27)
March KC Wheat closed 3 ¼ cents lower ($4.99), May 3 ¼ cents lower ($5.08 ¾) & July 3 cents lower ($5.19)
Are we incurring some winterkill in the Midwest SRW areas? Any winterkill occurring in the northern HRW areas? The price action is either suggesting “no” or the trade participants don’t care. How does one trade the idea of winterkill for the next couple of months when evidenced or not? All the rhetoric around higher Black Sea prices seems to be falling on deaf ears. The weekly sales report from December 20th was deemed no big deal. On Wednesday the halfhearted attempt to rally saw some support from the lower US Dollar. Today the US Dollar reversed course. Two weeks ago there was some talk that China would buy some US wheat. In recent days that “talk” was nowhere to be found. The bottom line is that the near 3 month old 40 cent trading range lives on for March Chgo wheat.
Interior cash wheat markets remain quiet. Export cash wheat markets remain quiet. Chgo spreads had a slightly firmer bias while KC spreads mostly flat on the day. The trend in Chgo wheat spreads is sideway to higher as is the bias for KC spreads. KC spreads are less robust looking when compared to Chgo. It was just last week that KC was trying to assert itself vs. Chgo. It was just last Thursday the March KC got within 9 ½ cents of March Chgo; today that spread traded out to KC 17 ½ cents under. I don’t think that bodes well for the flat price in its efforts to rally.
Flat price wheat is putting everyone to sleep. It tries to rally can’t go anywhere – it tries to break can’t go anywhere. Maybe next week’s “Winter Wheat Seedings” report will give us something to hang our hats on. Until then it called “fading short term inter-day extremes for short term inter-day trading opportunities.
Daily Support & Resistance for 02/01
Mch Chgo Wheat: $5.08 – $5.20
Mch KC Wheat: $4.95 – $5.08
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.