Wheat correction over for now?

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Wheat correction over for now?

Feb 10, 2020 | 10:14 1 Indicators on the daily wheat charts are suggesting the bull market correction inspired by concern over the coronavirus may be coming to an end.

In particular, the March Kansas Wheat futures (hard red winter) triggered a buy on the daily chart with an initial target of $5.32/bu then a secondary at $5.47. Minneapolis should follow suite with a goal of $5.90 then $6.04/bu US.

Given the Canadian dollar is looking like it is trying to break down through support at $.7500 US, the combined action should help our prairie bids.

We shall see… Reply With Quote
Feb 10, 2020 | 11:16 2 I guess the chart indicators I use are a little different.
Here would be my stance at present: I don't have a position on in any of the wheat pits.

Chicago, failed buy signal. Neutral, no position
Kansas, no buy signal. Hold or in other words, no further shorts added right now, be ready to lighten up
Minneapolis, no buy signal, short, not adding to position at present.

The correction could very well be over and your buy signal may turn out to be profitable.
My trend follower style is usually late to the party Reply With Quote
Feb 10, 2020 | 13:09 3 The next four weeks or so should tell the tale.

Maybe sooner if the signals fail... Reply With Quote
Feb 12, 2020 | 16:35 4
Quote Originally Posted by TechAnalyst View Post
Minneapolis should follow suite with a goal of $5.90 then $6.04/bu US.

I hope this is a realistic goal, $5.90 March would make wheat a decent price.

Everything is pointing towards holding wheat until summer. Reply With Quote
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  • Feb 18, 2020 | 08:54 5 Hey Tech, move up your stops! I think you're going to run out of time in the March. What are your targets for May?

    Update: Move 'em up some more!
    Last edited by farming101; Feb 18, 2020 at 12:27.
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    Feb 18, 2020 | 13:57 6 Good point farming, I absolutely would expect to have to roll to May futures as the time before first notice day for the March runs out.

    Today's strong rally suggests we should be on our way now to the May futures targets which are as follows,

    May Chicago wheat - $6.20 initially, $6.38 potentially
    May Kansas wheat - $5.39 initially, $5.55 potentially
    May Minneapolis wheat - $6.00 initially, $6.15 as a potential secondary

    It is worth noting that the Chicago wheat futures went inverted on Friday and built on that today. For those not sure, what that means is the March futures are now a premium to the May futures (instead of the normal discount for the cost of carrying the inventory to May). That is a bullish sign as it shows the need for inventory sooner rather than later. Reply With Quote
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  • Feb 19, 2020 | 02:14 7 News wires suggest it was official Australian wheat yields think 15.8 mill tonne.
    Since October it’s been known and the ma4ket reacts now??

    Could’ve happened during our harvest might have got 370 per tonne straight of the combine......

    Other grain news Australia granted permit to export into Indonesia feed barley.

    Betcha down around 4 to 6 cents tommorow Reply With Quote
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  • Feb 19, 2020 | 07:32 8 Mallee, smallest wheat crop in 12 years?

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    Feb 19, 2020 | 08:53 9
    Quote Originally Posted by malleefarmer View Post
    News wires suggest it was official Australian wheat yields think 15.8 mill tonne.
    Since October it’s been known and the ma4ket reacts now?
    Given the surge in gold and silver yesterday as well, I suspect it had more to do with some entity wanting to own commodities that had very little to no exposure to China (thus the lack of interest in the energy or oilseed markets).

    May well have been from money that had been taken out of the record high stock market as an overall portfolio management plan.

    If so, that would be a positive development as it's not usually a one day affair.

    Just a thought... Reply With Quote
    Feb 23, 2020 | 21:02 10 May Kansas wheat 3 gaps down.
    Oversold for sure, but I wouldn't say Chicago or Minneapolis is so it might not matter Reply With Quote
    Feb 24, 2020 | 02:01 11 Short term thinking this is gonna get boyhu. Reply With Quote
    Mar 15, 2020 | 17:41 12 Wheat prices have gained last week due to basis improvement (drop in CDN $). Reply With Quote
    Mar 15, 2020 | 17:46 13
    Quote Originally Posted by Oliver88 View Post
    Wheat prices have gained last week due to basis improvement (drop in CDN $).
    Same here our dollar 62 cents lost 5 cents since nov Reply With Quote
    Mar 15, 2020 | 19:10 14 That brings up a good point.

    Assuming the entire world economy doesn’t have a complete meltdown, those with money will eventually look for new areas to invest in. That usually is in sectors that have performed well during times of weakness.

    It may be our turn to get thrown down the outhouse next but so far, grains and oilseeds have held up relatively well. Especially when they are converted to Canadian dollars.

    Should that continue and the world begins to believe it understands the scope of damage – allowing investors the confidence to stick their toes back in the water, we may see the benefit of their interest.

    Meanwhile, the bright side of all of the ugly human behavior (panic hording) that this has highlighted is the need to take food security and supply seriously. Maybe the days of just in time inventory will be looked at negatively instead of celebrated.

    For now, let’s just pretend all this excessive money being injected at zero interest rates will lead to the food we produce getting the respect it deserves. Reply With Quote

  • Mar 16, 2020 | 05:28 15 Bit of red tonight again.

    Wheat is sneaking back up to $300 port for dec delivery take of $30 for my on farm price.

    Falling currency’s holding up our prices.

    Canola was 590 didn’t check today again port price take of 30 Reply With Quote
    Mar 16, 2020 | 10:09 16 Dollar keeps getting hammered today, now at .715

    Local wheat prices should be going up today. Reply With Quote
    Mar 16, 2020 | 10:17 17
    Quote Originally Posted by Oliver88 View Post
    Dollar keeps getting hammered today, now at .715

    Local wheat prices should be going up today.
    Grainco's usually share the exchange adjustments in a ratio of 99:1 in their favor. I would expect the same this time around all things considered. Yes I'm being sarcastic Reply With Quote
    Mar 17, 2020 | 11:56 18 Grain companies that were telling us the world is awash of wheat and the world is too good at growing wheat a month ago are now trying to buy wheat.

    Interesting but looks like holding wheat will pay off. Reply With Quote
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  • Mar 17, 2020 | 15:40 19 CBOT May wht up A$6.71/t to A$306.05/t & Dec up A$6.01 to A$316.31. Both driven solely by drop in A$ to 59.94 US cents. Support for CBOT as market tries to pick a bottom. HRW also supported despite some improvement in crop conditions in the Sth Plains. Reply With Quote
    Mar 17, 2020 | 18:04 20 ZWK has some pretty good support at 483. Some weaker support at 488 1/4

    KEK weak support at 416 7/8, but a good outside day higher so maybe it'll hold Reply With Quote
    Mar 18, 2020 | 09:59 21 ZWK action today encouraging. Look for a couple days closing price above 508 3/4
    510 3/8 high for today so far Reply With Quote
    Mar 19, 2020 | 07:24 22 I stand corrected. A very rough estimate shows the Grainco's only kept 28% of the exchange week/week

    KEK20 is in the buy signal area. Need confirmation tomorrow. The problem is with the quick increase (about 8.5% in three days) the price might not touch an entry area trigger till the rally is half over. In addition tomorrow is Friday. Expect traders to even up positions. Nobody with limited resources/no actual stocks will be eager to stay in the market over the weekend.

    Chicago rally a bit weaker and Minneapolis weakest at the moment

    Update: Chicago has now joined with a buy signal and MW not far behind. When I say buy signal I mean it's time to pay attention. Not necessarily time to buy
    Last edited by farming101; Mar 19, 2020 at 09:13.
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    Mar 23, 2020 | 12:02 23 Everything is possible and nothing is possible in this environment

    ZWN20 could be 30% up by third week of May.

    First though, the May contract still needs to rise above 5.77 and 5.87 to leave the downtrend behind Reply With Quote
    Mar 23, 2020 | 12:18 24 Just replying to note that some of us are reading and really appreciating the posts on this thread.

    Just because you're excellent analysis may go uncommented, doesn't mean it is unread or unappreciated


    Thanks for sharing. Reply With Quote
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  • Mar 23, 2020 | 12:39 25 For sure.
    While I don't mind putting some price destinations out there based on chart patterns I don't think I could ever recommend what guys do with their actual stocks. Totally up to them.
    Just kind of a heads up: this is happening today kind of thing Reply With Quote

  • Mar 23, 2020 | 18:13 26
    Quote Originally Posted by TechAnalyst View Post
    It is worth noting that the Chicago wheat futures went inverted on Friday and built on that today. For those not sure, what that means is the March futures are now a premium to the May futures (instead of the normal discount for the cost of carrying the inventory to May). That is a bullish sign as it shows the need for inventory sooner rather than later.
    I thought it would be worth bringing this forward given the inversion still exists. The May is trading at a 7 cent premium to the July, indicating the need for inventory sooner rather than later.

    In the big picture, a commercially driven rally is far more powerful than a spec rally. I suspect that will be the case here as well.

    AF5, I'm not sure if that was directed at me as well but if so, I'm glad to help if I can. If I'm doing the analysis anyway, why not share. Reply With Quote

  • Mar 23, 2020 | 19:39 27 How would you guys tackle selling wheat for June/July delivery?

    Futures seem to be increasing. CDN $ fluctuating but heading down with oil. Grain companies adjusting basis and protein spreads randomly.

    I plan to simply use a target for a fixed price but do get tempted to lock in basis than lock in futures later. Reply With Quote
    Mar 23, 2020 | 20:39 28 I'm not a huge fan of basis contracts unless they're exceptionally favourable. Especially with volatile futures markets and time constraints. You really are left with little for a plan B should the futures pull back and don't recover in time.

    I do believe the saucer on the monthly Chicago wheat chart and the inversion in the futures both point to a rally into the summer. The Can$ should continue to struggle as long as energy and equity markets remain under pressure.

    Given that, I would prefer to use target prices to reward a rally with a portions of the total sales to be made along the way. That reduces the stress, obtains a favourable average price as long as the rally unfolds, and leaves an endless amount of plan B options should something derail the rally.

    Hope that helps. Reply With Quote
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  • Mar 23, 2020 | 20:53 29 Incremental targets for flat price do make sense for June/July as well as new crop. Reply With Quote
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  • Mar 25, 2020 | 09:11 30
    Quote Originally Posted by farming101 View Post
    Everything is possible and nothing is possible in this environment

    ZWN20 could be 30% up by third week of May.

    First though, the May contract still needs to rise above 5.77 and 5.87 to leave the downtrend behind

    ZWK20 backing off from 5.77. High of 5.76 5/8 so far. Lots of energy though, could still break through or maybe tomorrow...
    The inversion Tech mentioned is growing

    Done, 5.87 next resistance...support at 555 1/4
    Last edited by farming101; Mar 25, 2020 at 11:27.
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