March Chgo Wheat closed 7 cents higher ($5.13 ¾), May 7 cents higher ($5.20) & July 6 ¾ cents higher ($5.27)
March KC Wheat closed 11 cents higher ($5.03 ½), May 11 ½ cents higher ($5.14 ¾) & July 11 ¼ cents higher ($5.25 ½)
The thought is that US wheat is competitive in the World’s export circles. Today’s break in the US dollar vs. yesterday’s rally offsets the rally in wheat futures keeping US competitive. The Russian wheat trade is quiet due to their ongoing Orthodox holiday. European wheat prices appear to be a follower of the US price action. It would almost be better for the US wheat trade if we don’t have a USDA report next week as the trade would be reminded of plentiful domestic stocks due to a slow export market.
Interior cash markets for US wheat continue to be relatively quiet. It there is a bias it’s slightly better; mostly due to slow movement. Not much happens with the export markets. Chgo spreads firmed fractionally due to the buying in the flat price. KC spreads ran softer up front thinking the recent 2-day rally might attract some movement. Old crop KC did gain on its new crop.
Daily momentum indicators are turning higher from the recent 3-week downturn. A 15 cent further rally cannot be ruled out. What I thought was most promising/friendly was KC’s continuing to reassert itself vs. Chgo. It was only late November that the March KC/March Chgo spread traded as much as 25 cents under. Today’s inter-market spread reflected a 15 cent improvement from what we saw in late November.
Daily Support & Resistance for 01/04
Mch Chgo Wheat: $5.08 – $5.22
Mch KC Wheat: $4.96 – $5.10
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.