Wheat Commentary

storck

Wheat – Just My Opinion

Dec Chgo Wheat closed 9 ¾ cents higher ($5.19 ¼), March 9 ¼ cents higher ($5.38) & July 10 cents higher ($5.54 ½)

Dec KC Wheat closed 11 cents higher ($5.22 ½), March 10 ¾ cents higher ($5.46 ½) & July 11 ¾ cents higher ($5.63 ¾)

After getting the short end of the stick these past few days US wheat futures became an upside leader on Tuesday. The day began with some minor inter-market spread profit taking involving the short wheat/long corn/long soybean spreads. Some of this buying was from the idea that newly planted winter wheat may be subject to flooding in the coming days. Areas of concern are a good portion of Oklahoma and the eastern half of Kansas. That did not create much enthusiasm for those trying to be long wheat but prices did manage to hold yesterday’s longs. The big news came late in the morning when it was announced that Russia may have to temporarily 30 grain loading facilities (export) for up to 90 days. This warning came from Russia’s agriculture safety watchdog group citing if a violation of phytosanitary rules is found. If this news comes to pass it would open the door for better US participation in the world wheat export markets.

Advertised interior wheat basis levels don’t change. HRW at the Gulf appears to be a shade better as does the SRW. Wheat spreads in both Chgo and KC saw some minor improvement within the current crop year while the current crop year loses to the new crop. I have to think the minor improvement in the old crop spreads is in response to the Russian news while the old crop losing to the new crop is in response to the flooding forecasts.

Today’s price action in wheat is trying to advertise an interim low may be in place. Confirmation of this happening in the Chgo Dec market would occur with closes over $5.33. To see the confirmation in the Dec KC market I would need to see closes over $5.36. For what it is worth – the European wheat market closed lower before the Russian news item hit the news wires. The nighttime US markets just may wait to see how Europe reacts to this news before they decide to either pursue today’s rally or fade it.

Daily Support & Resistance for 10/03

Dec Chgo Wheat: $5.13 – $5.27 ($5.33)

Dec KC Wheat: $5.17 – $5.30 ($5.36)

 

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