Sept Chgo Wheat closed 15 ½ cents lower ($4.99 ¼), Dec 14 cents lower ($5.22 ½) & March 13 ¼ cents lower ($5.46 ¼)
Sept KC Wheat closed 17 ½ cents lower ($5.01 ¾), Dec 16 ¾ cents lower ($5.30) & March 16 ¼ cents lower ($5.54)
Weekly Wheat Export Inspections – 488.1 K T. vs. 300-500 K T. expected
Weekly Spring Wheat Progress – Harvested – 77% vs. 78% expected vs. 61% 5-year average
Egypt announces an overnight tender for optional origin wheat. Given the recent break in prices will the US try to participate?
Wheat prices just finished their 6th day of lower closes. It’s liquidation no matter where one looks. Flat price US futures continue to liquidate. European futures continue to liquidate. Inter-market spreads involving long wheat continue to liquidate. This type of price action suggests speculative wheat traders of the World just got too long in anticipation of higher prices. Nothing within the global supply-demand has changed; it’s going to get tight as we move down the road. The fact of the matter is that its just not tight right now.
Advertised cash wheat prices remain unchanged. This holds true for both domestic and export. Spreads widen out with the continued liquidator as well as 1st notice day on Friday.
Is 6 days down enough? The last break of this magnitude was in mid-June; 5 days down equaling 72 ½ cents followed by 3-4 day of upflagging and then eventually and 10 cents down. The current break is only 60-61 cents. Most daily and inter-day technical indicators have a degree of oversold to them but without some fundamental rationale (better business) the best that can be hoped for in the near term is some minor retracement.
Daily Support & Resistance for 08/28
Dec Chgo Wheat: $5.17 (?) – $5.35 ($5.40)
Dec KC Wheat: $5.28 ($5.22) – $5.45 ($5.50)
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.