July Chgo Wheat closed unchanged ($4.79 ½), Sept 5 cents lower ($4.83 ½) & Dec 4 ¼ cents lower ($4.99 ½)
July KC Wheat closed 7 cents lower ($4.53 ¼), Sept 6 ¼ cents lower ($4.72) & Dec 6 cents lower ($4.95 ½)
Weekly Wheat Export Sales – 563.7 K T. old crop vs. 250-500 K T. expected – no new crop vs. none expected
Average Trade Estimate for Wheat Quarterly Stocks – 1.091 billion bu.
Average Estimate for Planted Wheat Acres – All Wheat – 47.102 million vs. March 2018 at 47.339 – Winter Wheat – 32.663 million vs. March 2018 at 32.708 – Spring Wheat – 12.431 vs. March 2018 at 12.627
Flat price wheat has little luck in trying to extend Wednesday short covering. In Chicago prices were able to take Wednesday’s high by a ½ cent but that was it. KC wheat is still liquidating as it registers new lows and new low closes for the current down move. News wires want to call it harvest pressure. How can it be harvest pressure when basis is trying to strengthen? The bottom line is that specs continue to liquidate due to a lack of business. The ongoing strength of the US Dollar works to keep the US on the sidelines of being competitive in the world export circles.
Burns Harbor is now reaching a bit for SRW. The July/Sept spread traded into a 1 cent carry before settling at a 4 cent carry. Coming into today there were only 11 contracts registered for delivery. Basis levels for HRW continue to show a firm bias but it does nothing for the KC spreads as they stay relatively wide. Coming into today there 296 KC contracts registered for delivery.
It’s hard to imagine there is much left on the downside for KC wheat but I learned a long time ago that markets will go lower vs. what we think reasonable. From a time frame I don’t think there is a lot left on the downside but from a price standpoint it’s still wide open. Chgo still shows room to move lower in both a time frame as well as in price. My personal opinion is that the trade is getting too bearish but I’ve been here before. The bottomline is that the price action still leaves a lot to be desired and I’ve got nothing to hang my hat on as far as a turnaround is concerned.
Daily Support & Resistance for 06/29
Sept Chgo Wheat: $4.75 (?) – $5.10
Sept KC Wheat: $4.66 (?) – $5.05
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