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Wheat - Just My Opinion


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March Chgo Wheat closed 1.75 cents higher ($5.20), May 1.25 cents higher ($5.21.75) & July 0.75 cent lower ($5.22)

March KC Wheat closed 1.75 cents lower ($4.92), May 2.5 cents lower ($4.97) & July 3.5 cents lower ($5.03.75)

Spreading is once again the big feature in the US wheat futures’ markets. Mpls gains on everyone especially KC. KC continues to lose to Chgo. Chgo’s March/May spread comes within a half cent of even money. KC’s intra-market spreads also a bullish bias despite the lower flat price. Mpls, not to be left out, sees its intra-market spreads show a bullish bias as well. With all of the bullish intra-market spreading going on it really suggests the trade is expecting to see better export business as we move forward. It does need to be noted that Paris wheat futures are approaching low levels last seen in mid-November. I’m also told that Russian prices have slipped noticeably form last week’s highs. So does all of this mean that US origin is going to be the “man” going forward in the world export circles? Or are the low deliverable registrations behind the bull spreading?

Interior cash wheat prices if not fully steady are firm. Export prices are strong looking as well. Needless to say the spreads in the futures’ markets are reflecting the stronger looking cash prices.

Despite the bull spreading wheat futures remain trading range bound. If we are going to break out to the upside we’ll have to actually see better business and not just speculate that it is coming. We thought that early last week and prices were down 20 cents just a few days later. It still bothers me that KC continues to lose to Chgo. Recent precedent had the Dec KC 2018 trade 44 cents below the Dec Chgo 2018. Flat price trading should continue to be relegated to fading the short term inter-day extremes until otherwise proven wrong.

Daily Support & Resistance for 02/13

Mch Chgo Wheat: $5.14 - $5.28  

Mch KC Wheat: $4.87 (?) - $5.00

 

Futures trading is Risky - You can lose everything and more 



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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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