July Chicago wheat fell 30 cents Friday, April 29, ending the week with a 19 1/2 cent loss at $10.55 3/4. The lower week was a bit of a surprise, coming at a time when the world is concerned about having enough wheat supplies while Russia continues its attack on Ukraine, leaving no part of the country safe from harm. Chances for rain in the southwestern Plains over the weekend and early next week coaxed prices lower, but there is also a concern about demand with May Chicago wheat priced 12 cents below the July contract. Also late Friday, the CME reported 968 deliveries of Chicago wheat, another sign commercials see little need to hang on to supplies. Technically speaking, July Chicago wheat encountered resistance near $11.43 a bushel in April and is at risk of breaking below its 50-day average at $10.47 1/2 -- a bearish change in trend if that were to happen.KC WHEAT:
July KC wheat had an even bigger tumble Friday, dropping 35 1/2 cents to $11.05 3/4 and posting a loss of 43 3/4 cents on the week. Like Chicago wheat, KC wheat has also been supported by concerns about Ukraine and had the additional bullishness of HRW wheat crops suffering drought in the southwestern U.S. Plains. The Dakotas, Nebraska and eastern Kansas caught some rain Friday and more is expected to reach from Nebraska to central Texas the next several days. Commercial demand is also waning for HRW wheat with the May contract priced 11 1/2 cents below the July. The CME reported 100 deliveries of May KC wheat late Friday, not as bearish as Chicago wheat, but certainly not a bullish sign of demand. Technically speaking, July KC wheat is still in an uptrend, but is losing upward momentum. A close below $10.79, if it happened, would signal a bearish change in trend and would likely trigger noncommercial selling.MINNEAPOLIS WHEAT:
September Minneapolis wheat was also caught up in Friday's selling and closed down 24 1/4 cents at $11.53 1/4. Unlike winter wheat, September Minneapolis posted a 2-cent gain on the week, its highest weekly close in 14 years. In addition to support from the war in Ukraine, spring wheat prices have benefited recently from concerns the whole crop won't get planted this year, especially in North Dakota which is just climbing out from under snow in the west and is dealing with flooding in the east. North Dakota accounts for roughly half of U.S. spring wheat production. It is a little suspicious that the May contract recently slipped below the July price and ended Friday at a 4 3/4-cent discount. Technically speaking, the trend remains up despite Friday's lower close with prices well above the 25-, 50- and 100-day averages.
Comments above are for educational purposes only and are not meant as specific trade recommendations. The buying and selling of grain or grain futures or options involve substantial risk and are not suitable for everyone.
Todd Hultman can be reached at Todd.Hultman@dtn.com
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