Dec Chgo Wheat closed 9 ½ cents lower ($4.98), March 7 ½ cents lower ($5.06 ½) & July 5 ½ cents lower ($5.19 ½)
Dec KC Wheat closed 6 cents lower ($4.58 ½), March 6 ¼ cents lower ($4.83 ½) & July 6 ¼ cents lower ($5.09 ½)
The two loads of SRW sold to Egypt last week did not go very far as Chgo wheat sags back down to recent interim lows. KC wheat pumps out another round of contract lows along with new contract low closes. A Russian Ag agency comes out and says they are still on track to export 34.0-35.0 M T. of wheat. Freshly harvested Argentine wheat is starting to hit their export terminals. Active spreading ahead of 1st notice day in Chgo was another major feature to Tuesday’s trade. Spreads in Chgo had been improving in recent weeks due to cancellations of delivery registrations. Today they sagged from spec longs overstaying their welcome and that was part of the bearish looking price action.
The interior cash markets for SRW continue to be very quiet. The Gulf for SRW has been easing dating back to November 15th. If one wants to an improving interior cash wheat market it’s the HRW market. Unfortunately it has done little to influence the HRW export market. With that said I have to think the improvement is demand from domestic millers not for export. KC wheat spreads stay slack looking.
First notice day occurs this Friday and deliverable registrations are tight for Chgo and coming down in KC. So far this has done little to spark the flat price. One thing I do know is that KC’s discount to Chgo hasn’t been this great since late August, early September of 2007. Just how long this continues remains to be seen. I’d like to say the KC market is developing a fair degree of oversold while the Chgo market is nowhere near it but so far this too has done little to spark the flat price. Let’s see how deliveries on Friday pan out and go from there.
Daily Support & Resistance for 11/28
Mch Chgo Wheat: $5.01 – $5.12
Mch KC Wheat: ??? – $4.91
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