Wheat Commentary

storck

Wheat – Just My Opinion

Sept Chgo Wheat closed ¼ cent higher ($4.72), Dec ½ cent lower ($4.75 ¾) & March ¾ cent lower ($4.83 ¼)

Sept KC Wheat closed 8 ¾ cents lower ($3.83 ½), Dec 8 ½ cents lower ($4.00 ½) & March 8 ¼ cents lower ($4.17)

Sept Mpls Wheat closed 6 cents lower ($5.03 ¼), Dec 5 ½ cents lower ($5.16 ½) & March 5 ¼ cents lower ($5.31 ¾)

If you’re trying to be friendly to the wheat market you’re buying Chgo. If you’re trying to be bearish to the wheat market you’re selling KC. Of the tradeable varieties it’s the SRW that has the tightest stocks to usage ratio. In addition to that the quality of the SRW is the most questionable to the end-user miller. It was the HRW category that had the increase in projected ending stocks while all of the other varieties ending stocks ran unchanged or lower. I don’t think it is that much of a flat price play as it‘s a spread play. The monthly chart of KC vs. Chgo is the weakest KC has been going back to 2004. One would think the spread is dramatically oversold; the monthly RSI is at 22, the weekly is at 25 and the daily is at 29.

The advertised interior basis for standard protein whet runs unchanged for both SRW and HRW. The export market for HRW appears to be steady to firm while the export market for SRW appears to steady to weaker. Chgo spreads ran fractionally better upfront while KC spreads ran fractionally easier.

Dec Chgo wheat is trying to realize support against the $4.70 level but so far it’s not too convincing looking. I’m looking at better support against the $4.60 level. Not much can be said for the KC market as new contract lows and closes were registered once again. Weekly KC charts bottomed in mid-May against $3.78. Sept KC is only 5-6 cents away. After that level it’s the Sept 2016 low at $3.67.

Daily Support & Resistance for 08/14

Dec Chgo Wheat: $4.70 ($4.65) – $4.84

Dec KC Wheat: $3.95 (?) – $4.08

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