Wheat Commentary - Just My Opinion

Weekly Wheat Export Sales old crop vs. 0-200 K T. expected new crop vs. 100-300 K T. expected

Flat price Chgo wheat honors the suggested interim upside reversal that was registered on Tuesday with consolidating type price action on Wednesday. The KC market played a bit of catch-up as prices ran unchanged on Tuesday but modestly higher on Wednesday. The news has not changed the HRW areas of the US are slated to see moisture over the near term. Areas of concern overseas with our export competitors are expected to subside with minor weather changes. US wheat is still not competitive in the global markets despite the recent slide in the flat price. Right now support is being realized through technical considerations which in turn is prompting some inter-market spreading which involves covering short wheat.

Interior cash markets are quiet with a very slight weak bias. Not much happens with export as evidenced with recent feeble sales and shipments. Plan a higher old crop carryout when the current marketing season ends at the end of May. Chgo wheat spreads ran pretty steady on the day; maybe a minor fractional increase in the bull spreads in Chgo. KC spreads, too saw some minor fractional improvement.

So are wheat prices making an interim low. We may see some further bump-ups in the flat price but overall my short term bias is for consolidation. Maybe if the forecasted rains for the US HRW areas fail to materialize we can get some noticeable rally. As of this writing Im thinking rally potential for July Chgo wheat willbe limited to $5.05 to $5.10. Potential for July KC is something to the tune of $5.25 to $5.30.

Daily Support & Resistance for 05/17

July Chgo Wheat: $4.90 - $5.04

July KC Wheat: $5.10 - $5.25

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