Commentary
May Chicago wheat closed up 9 1/2 cents at $5.47 1/4 and near the session high. Prices hit another contract low early on hitting a new low at 5.23. KC wheat closed up 10 cents at $5.98 3/4, nearer the session high and hit a three-week high. We are currently in 3rd day of the Goldman Roll, which may be why Chicago wheat closed 24 cents higher from the daily low while putting in a reversal on the daily chart. Both corn and wheat have seen reversals on charts the last few months from time to time with the result being funds re-shorting on rallies after profits were taken. They have defended their positions and have done it well. I’m looking for signals outside of the near-term technical picture, that could tell us today’s low is the bottom. I hope it would be but not sure that it is. The world cash market remains depressed with Russian FOB values dominating commerce. Russian values offered for less than $200/mt for April. The heavy selling that began this morning comes on the news that USDA announced that China canceled more US Chicago wheat sales for future shipment. This time it was 264K metric tons. This brings the total number to 3 in the last week totaling 500K metric tons. The US still has 1.4 million metric tons of commitments on the books with China, with 600K out for shipment already. There was talk of Ukraine’s Odesa port getting attacked by Russia, but in my view it did little for wheat when announced. May Chicago wheat put in an impressive bullish hammer/engulfing formation after making new lows but finishing above Friday’s highs which could make sellers proceed with caution here. Still room to maneuver higher, so will see how we progress. I included a daily chart below. Support is 5.40. A close below and I wouldn’t be long May Chicago wheat. We need to hold trendline support on closes at that level in my opinion. Daily resistance is 5.56. A close over and the market on short covering amid a friendly technical picture could make a quick run near 5.90 in my opinion.
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