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Wheat - Just My Opinion

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July Chgo Wheat closed 19 cents lower ($4.69 ), Sept 20 cents lower ($4.71 ) & Dec 19 cents lower ($4.90 )

July KC Wheat closed 20 cents lower ($4.63), Sept 20 cents lower ($4.74) & Dec 19 cents lower ($4.98 )

Flat price wheat continues to be a follower; a follower of the general gloom and doom in the Ag sector. European prices continue to retreat from the highs they saw late last week. The renewed strength in the US Dollar also weighs on US prices as it keeps them from being competitive in the World export circles. Tomorrow is report day as the USDA will update US production, US supply-demand and World supply-demand. The US wheat carryin will rise by 20 million bu. based on the last June Quarterly Stocks figure. US production should rise given the increase in acres the USDA reported on June 29th. The World supply-demand could be a bit different given that a number of our export competitors are reporting lower crop sizes; higher production for the US vs. lower elsewhere.

Not much new happens with the interior wheat basis levels. Both varieties, SRW and HRW, continue to show a firm bias. The export market for SRW sags a bit while the export market for HRW stays steady to firm. Bear spreads work in both markets as the flat price selling dominates.

Flat price Chgo wheat moves down to a level not seen since February. Daily momentum indicators that have been struggling to stay friendly looking have now completely rolled over. The technical look now suggests probes of the Dec 17 and Jan 18 lows are not out of the question. The KC market has yet to take out its late June, early July lows but it looks like it wouldnt take much for that to happen. Going forward it is my opinion that the US wheat market will continue to be a follower of what the rest of the Ag sector is doing.

Daily Support & Resistance for 07/12

Sept Chgo Wheat: $4.63 ($4.54) - $4.97

Sept KC Wheat: $4.66 ($4.56) - $4.97

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.

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About the author

Tom Fritz is a third generation commodity futures trader. His grandfather and his father were traders on the exchange. Tom began his career in 1971 with Tabor Grain which was later acquired by Archer Daniels Midland. Prior to co-founding IFG in 1994 Tom was the lead Chicago Board of Trade floor analyst for ADM. He produces Just My Opinion, a daily grain commentary that is well respected and viewed all over the world.



Contributing author since 11/7/2017 

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