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May 22 Dan Maltby Marketing Newsletter

May 22 Dan Maltby Marketing Newsletter

Hello Kansas Wheat.

The past week KC July wheat futures closed on a strong rebound for the week to finish sharply…unchanged. Not exactly a bull market, but interestingly, possibly uncovering some latent depth of demand.

Which it should, as wheat remains relatively cheap.

This is a weekly continuous KC wheat futures chart, in a line format. The computer draws a dot at the close every Friday, and then connects the dots, or something.

There are 2 parallel “magic lines” shown; the red one at $4.03, and the blue one at $4.67.

These are lines of powerful magic. It will take a cosmic event for these lines to yield.

Thus for the foreseeable future, the nearby KC wheat future will remain inside of these lines.

Other magic lines exist besides these 2 shown; some are below the $4.03. One exists at $3.57. My opinion is the various wheat balance sheets fundamentally are not heavy enough to force a move down to those levels.

Conversely, a magic line above the $4.67 might be at $5.06, and current fundamentals don’t support a move to up there either.

KC July settled at $4.38 this week, almost exactly half way between the red line and blue line, and it’s difficult to tell which way the teeter-totter is moving, because the reality is…the teeter-totter is not really moving.


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Source: Kansas Association of Wheat Growers