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Middle Tennessee | Just when you guys thought I couldn't keep it up,
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The wheat market challenged the courage of buyers yet again Tuesday. The KC wheat market hit the only discernible support level at $4.82, a trend line off the lows from late January to early March. After a mid-session poke to $4.60, the Chicago market joined KC and Minneapolis wheat in trading below levels seen this year, or last year, or the year before that, or….you get the idea. Of all the sundry crap commodity performers in recent years and months, wheat is the crappiest, and today was a highlight of that record. Evidently Asian millers are satisfied to watch and wait for higher prices to book deliveries, in yet another illustration of how, in the commodities, “Buy Low” does not apply.
http://af.reuters.com/article/commoditiesNews/idAFL4N0XO3SO20150428
We did get a reversal in the wheats today, with KC wheat the firmest. There was nothing but the long wick of a candle on the Chicago chart below $4.70, as hedge funds were either selling wheat to themselves, or found a small cache of Sell Stop Losses (in the true sense) triggered below $4.65. Open interest was down 3k contracts in Chicago, and up 3k in KC.
Until very recently, the US led the world in wheat exports. Now, if the market is to believed, US production is irrelevant to global prices. I say this as the most important regions in the Plains continue have production questions from drought, and more recently, stripe rust fungus. The winter crop here is not made, but the market is choosing to trade a good pace of spring wheat planting, presenting it’s own risks down the line. I continue to think, there may not be a lot of buyers right now, but we’re about to run out of sellers. | |
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Nothing But A Long Wick
