Sept Chgo Wheat closed 2 ½ cents higher ($4.62 ½), Dec 1 ½ cents higher ($4.68) & March ¼ cent higher ($4.74 ½)
Sept KC Wheat closed ½ cent lower ($3.86 ¼), Dec 1 ½ cents lower ($4.00 ½) & March 2 ¼ cents lower ($4.15 ¼)
Sept Mpls Wheat closed 1 ¾ cents lower ($5.02 ¼), Dec 1 cent lower ($5.15) & March 1 cent lower ($5.29 ¼)
Weekly Wheat Export Sales – Old crop vs. 300-500 K T. expected – new crop vs. none expected
US wheat futures continue to struggle. Chgo what was able to finish slightly higher on the coattails of the corn market while KC and Mpls had problems sustaining anything on the plus side. European wheat futures continue to grind lower into new contract low ground. World prices elsewhere continue to fade lower. The World remains flush with wheat and all of the major exporters are vying for market share and that, more times than not, results with lower prices. Watch the weekly export sales report in the morning for signs that just maybe the US market share may be improving.
Cash wheat movement remains minimal. Advertised basis levels for standard protein run unchanged. I’m not seeing any changes with export prices. Bull spreads were working in both Chgo and KC. I think this is a function of shorts bailing as we draw closer to first notice day late next week. Wheat registrations have been slight for both Chgo and KC. Chgo registrations may stay slight due to concern over the availability of SRW milling quality. This is a basis/spread play not necessarily a flat price play.
Chgo wheat registers a minor reversal for the current down move. I’m not sure there is much rally potential from this signal but it just may be enough to start some consolidation. I’ve been with the frame of mind Dec Chgo wheat should realize some decent support from $4.60 down to the mid-low $4.50’s. Wheat has been trending lower in a well-organized channel since the highs were made in late June. Current prices have been flirting with the support line of that down channel. KC prices have been much weaker but the “channel” ideas are here as well. I’m not a fan of owning wheat for more than a 2-3 day trade but I don’t think we need to sell current levels to play the game.
Daily Support & Resistance for 08/22
Dec Chgo Wheat: $4.63 – $4.75
Dec KC Wheat: $3.97 (?) – $4.10
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.