Dec Chgo Wheat closed 5 ¼ cents lower ($5.06 ¼), March 5 cents lower ($5.25 ¼) & July 4 ¾ cents lower ($5.45 ½)
Dec KC Wheat closed 3 ½ cents lower ($5.12 ¾), March 3 cents lower ($5.34) & July 3 ¾ cents lower ($5.48 ¾)
Weekly Wheat Export Inspections – 406.0 K T. vs. 350-500 K T. expected
Weekly Spring Wheat Progress – Harvested – 97% vs. 98% expected vs. 92% 5-year average
Weekly Winter Wheat Progress – Planted – 13% vs. 14% expected vs. 14% 5-year average
Egypt announces an overnight tender for optional original wheat
It was a tough two-sided trade for US wheat futures Sunday night, Monday. Futures started higher responding to reports of frost in Western Australia where they have the best wheat crop. Saudi Arabia buys 630 K T. of wheat over the weekend from N. America (sans Canada), S. America and Australia. The early firm price action gave way to lower prices when the day session got going but soon rallied to the plus side. The declining value of the US Dollar Index lent support when futures tried to sell-off but really could offset the bearishness elsewhere in the Ag complex. Chgo saw its early in the day lows challenged late and KC made new lows for the day late. It will be interesting to see how the announced Egyptian tender turns out as many are trying to suggest Russian exports will becoming thin by November. Will the US offer anything?
Advertised wheat basis levels continue to steady. There are enough fluctuations in the flat price to keep net bids moving around. Spreads in Chgo ran steady to fractionally weaker while in KC March forward showed a bullish bias. I asked this last week – Does KC gaining on Chgo despite the lower flat price suggests something of a longer term situation developing? Last Thursday the Dec/Dec traded even money; today Dec KC traded 7 cents over.
It seems the majority of the wheat news today had a friendly bias to it yet the flat could not generate anything sustainable on the upside. With this in mind I would normally think we have lower prices to look forward to. Maybe I’m wrong but I smell a rat here – the rat is the spec trade got too long and now they are caught in a liquidation run. Just who offers what to the Egyptian will be the trades’ focus for Tuesday’s trade.
Daily Support & Resistance for 09/14
Dec Chgo Wheat: $5.05 ($5.00) – $5.17 ($5.22)
Dec KC Wheat: $5.10 ($5.05) – $5.22 (?)
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.