Wheat Commentary

storck

Wheat – Just My Opinion

Sept Chgo Wheat closed 3 ½ cents lower ($5.10 ¼), Dec 3 cents lower ($5.29 ¼) & March 3 cents lower ($5.46 ½)

Sept KC Wheat closed 1 cent lower ($5.09 ¾), Dec 1 ¼ cents lower ($5.35 ½) & March 1 ¼ cents lower ($5.54)

Overnight Egypt buys 420 K T. of wheat – 240 K T. Russian, 120 K T. Ukraine and 60 K T. Romania

Flat price US wheat futures ease overnight and into the early part of the day session. This was prompted by an easing European wheat market. By mid-morning European prices began to firm, eventually registering new highs for the current rally. This in turn prompted US wheat futures to move the plus side. Once again, however, when the European wheat market closed for the day US prices began to slide. It was very reminiscent of Monday’s trade but at lower levels. As long as the competitors’ prices remain prone to moving higher US prices won’t be far behind (just behind enough to keep them from being competitive). For what it is worth the Wheat Quality Council tour in N. Dakota is finding 5-year average yields which are noticeably better vs. last year’s yields.

Interior cash wheat prices (HRW & SRW) are seeing few if any changes. The export market for SRW is stable while the HRW export market continues to slide lower. Chgo spreads had a fractional bearish bias while KC had a fractional bullish bias. The KC market is working hard to regain leadership over Chgo. If this continues I would suspect the flat price will be prone to moving higher as well.

All the price action is offering me is a correction to the sharp rally that has occurred over the past couple of weeks.  Tuesday’s lows came close to challenging suspected interim support before it started to rally. As long as the European wheat market is biased to move higher Chgo and KC will follow but to a lesser extent. For US prices to take over a leadership role Exports will have to see some noticeable improvement.

Daily Support & Resistance for 07/25

Sept Chgo Wheat: $5.02 ½ – $5.20

Sept KC Wheat: $5.00 – $5.18 (?)

 

 

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