Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 9 cents higher ($4.56 ¼), Dec 7 ¼ cents higher ($4.60 ¾) & March 7 ¼ cents higher ($4.67)

Sept KC Wheat closed 12 cents higher ($3.74), Dec 2 ¼ cents higher ($3.84 ½) & March 1 ¼ cents higher ($3.99 ¾)

Sept Mpls Wheat closed 8 cents higher ($4.74 ½), Dec 6 ½ cents higher ($4.93 ½) & March 6 ¾ cents higher ($5.07 ½)

Short term oversold (daily data was not) coupled with a sharply lower US dollar brings us some short covering. Chgo wheat traders do like referencing moves in the US dollar for their short term trading. I also think the Chgo traders got over the move Cargill did when they delivered 440 contracts of HRW against the Chgo contract which is supposed to be a an SRW contract. The deliveries of the HRW did nothing to solve the idea that the SRW market is tight. The KC market struggled to sustain its attempt to rally as it reflects the global flush of wheat.

Advertised basis levels for standard protein wheat are higher. If my sources are correct Toledo had been bidding 25 over the Sept; now they are bidding 25 over the Dec. Toledo is a soft wheat market so take it from there. The basis for HRW is also running steady to better. Despite better basis levels cash wheat sales are running next to nothing. So with all this being said wheat spreads had a bullish bias in all 3 varieties.

As far as I’m concerned what we saw today was just a rally in a bear market. In the past you’ve heard me talk about how wheat prices are in a well-defined down channel. Yesterday’s lows fell against the support line of the down channel. When this has happened in past weeks the price action that followed was sideways to higher. I see no reason why we should not repeat these previous patterns.

Daily Support & Resistance for 09/05

Dec Chgo Wheat: $4.55 – $4.65

Dec KC Wheat: $3.80 – $3.90

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.