Sept Chgo Wheat closed 6 ¼ cents higher ($5.36 ½), Dec 5 ¼ cents lower ($5.56 ½) & March 4 ¾ cents lower ($5.72)
Sept KC Wheat closed 6 ¾ cents lower ($5.34), Dec 5 ¾ cents lower ($5.60 ½) & March 5 ¼ cents lower ($5.77 ¾)
Weekly Wheat Export Sales – 385.9 K T. old crop vs. 200-500 K T. expected – no new crop vs. none expected
International Grains Council (IGC) cuts World wheat production by 16.0 M T. to 721.0 M T. – earlier this month USDA suggested 736.26 M T.
European Wheat, Chgo Wheat and KC Wheat are all advertising they have gone high enough for now as all of these markets registered new highs for their respective rallies and finished lower on the day. The Mpls market was almost in the same boat as its closes ran fractionally lower to fractionally higher. The news of the day was IGC cutting World wheat production by 16.0 M T., still feeble looking US weekly export sales and the Wheat Quality Council suggesting the spring wheat yield at 41.1 bpa vs. 38.1 bpa last year vs. the 5-year average of 45.4 bpa vs. the USDA’s most recent at 47.6 bpa.
Interior cash wheat prices are showing me a mixed reading. It looks like the Lake Michigan is looking for SRW. SRW at the Gulf is quiet. It looks like the rally in KC has attracted some movement out of Oklahoma as bids there are showing some easiness. Track HRW down to the Gulf continues to slide. Chgo spreads were soft Sept to March while March forward spreads were firm. KC spreads were soft upfront; flat March forward.
As I mentioned earlier today’s price action is suggesting we have gone high enough for now. I don’t think we are going to enter a bear market but rather some correction. On the surface the World supply numbers are still rather friendly looking and that opens the door for the US to garner some better business. As of this writing I’m thinking Sept Chgo wheat trades back down towards the $5.20-$5.10 level while Sept KC trades back down to the $5.15-$5.10 level. I hope I’m not in left field with this idea but I don’t think this market is over just time for a correction.
Daily Support & Resistance for 07/27
Sept Chgo Wheat: $5.23 – $5.46
Sept KC Wheat: $5.22 – $5.42
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