FOR WEDNESDAY: (5/24) We usually don’t want to be short grains on Wednesday so watch carefully and take partial profits and move stops down. We could see short-covering on Thursday before the long weekend but market looks lower after the holiday. Corn and soybean futures closed lower as USDA data late yesterday showed farmers successfully dodged most of last week’s rain showers to stay current on spring planting. Wheat futures slipped as USDA data also showed some improvement in the winter wheat crop and good planting progress for spring wheat.
JULY CHICAGO WHEAT (electronic ok)
TODAY’S COMMENTS: (5/24) Break to 428 means we’re on the right side of this market. First support at 422 and then 416.50. Market may bounce on Thursday but I think we can be short into the weekend. While the weather remains troublesome for winter wheat, with more rain forecast later this week for the Plains, USDA said the crop improved 1 point to 52% good/excellent last week, contrary to forecasts for a small slippage in ratings. However, Illinois wheat lost ground with USDA rating it 44% good/excellent compared with 52% the prior week.
OVERALL: Seasonal pressure is always on winter wheat into late May and it can sometimes extend into mid-June. Three waves down on the weekly continuation chart project 3.99 and the USDA has given 3.85 as the lower end for where prices may go and they figure the market will not get above 465. Hard for us to see wheat getting above 438-440 again and given the downside potential to 399 or 385 on July wheat, we have to continue to sell rallies. First place July wheat will fall is 418 and then 410-2.
CYCLES OVERVIEW: Lower into May 24; higher into May 26; May 29-31 low.
