July Chgo Wheat closed 12 ½ cents higher ($5.04), Sept 14 ½ cents higher ($5.05 ½) & Dec 13 ¼ cents higher ($5.19 ¾)
July KC Wheat closed 19 ¾ cents higher ($4.82), Sept 19 ¼ cents higher ($5.03 ¼) & Dec 18 ¼ cents higher ($5.24 ½)
Weekly Wheat Export Sales – old crop vs. 300-500 K T. expected – new crop vs. none expected
US wheat futures continue to take their cue from European wheat prices. European prices were strong overnight as traders there continue to assess the lower French and German wheat crops. It is also thought that areas of the Russian wheat crop continue to have their problems as well. As far as the US/China trade dispute goes the wheat market has the least to lose as China is only targeted to import 4.0 M T. of wheat this year. The US wheat futures trade will continue to follow the lead of European prices.
Interior cash wheat basis continues to show a firm bias. In recent weeks it was the HRW basis that had been firming; now we see the SRW firming as well. Sept forward spreads for both Chgo and KC are showing noticeable life. We haven’t seen any new market making business but if our global competition continues to show supply problems I have to think the business will soon come our way.
If and when Chgo Sept closes above $5.10 expect to see a rush of spec short covering. Daily technical readings are trying to turn higher. The KC market is showing the same type of technical price action. $5.10 to $5.15 appears to be this market’s technical hurdle.
Daily Support & Resistance for 07/06
Sept Chgo Wheat: $4.91 – $5.20
Sept KC Wheat: $4.85 – $5.14
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.