Wheat - Just My Opinion

Weekly Wheat Export Sales old crop vs. 50-300 K T. expected new crop vs. 100-300 K T. expected

The EU cuts its soft wheat production by 4.3 M T. Its all about the ongoing dryness in Western Europe. This and the continued slide in the US Dollar brought short covering/new longs into the market today. At one point July Chgo wheat was up 14 cents and July KC wheat 16 cents before some late selling had prices easing into the close. If we add in the EUs cuts to production along with the recent cuts advertised for Russia and Ukraine the next World supply-demand report could see a noticeable cut to the next global production report. I do have to mention that the IGC did raise global wheat production by 2.0 M T. this morning but they are still 2.0 M T. shy what the USDA had to say earlier this month.

Advertised interior basis levels for standard protein what continue tot run unchanged with not showing a bias one way or the other. The Gulf basis for HRW is unchanged while the SRW export basis holds onto recent easing. Chgo spreads showed a bullish bias in light of spec buying while KC spreads only showed a fractional improvement. It will be interesting to see if todays rally will catch any producer HRW selling ahead of the weekend as Texas should be harvesting.

Wheat charts are trying hard to say we have established interim bottoms. I will say that as much charts look more positive after todays performance weve got a long way to go before we can say the wheat market is in a full blown bull mode. I see a number of resistance levels not far above current levels that need to be dealt with first. Long story short we have room to rally in the short term but chasing inter-day rallies is not advised

Daily Support & Resistance 5/28

July Chgo Wheat: $5.09 - $5.25

July KC Wheat: $4.56 - $4.72

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