Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 7 ¾ cents higher ($4.64), Dec 5 ½ cents higher ($4.66 ¼) & March 5 ½ cents higher ($4.72 ½)

Sept KC Wheat closed 8 cents higher ($3.82), Dec 9 ¼ cents higher ($3.93 ¾) & March 7 ¾ cents higher ($4.07 ½)

Sept Mpls Wheat closed 8 cents higher ($4.84 ½), Dec 8 cents higher ($5.02) & March 7 ½ cents higher ($5.15 ½)

Weekly Wheat Export Sales – old crop vs. 400-800 K T. expected – new crop vs. none expected

US wheat futures continue to garner support from a weak looking US dollar. The “hard” varieties were your upside leaders which is a bit of a switch in the recent trend. Other than spread realignment I’m not sure why. Some are suggesting that recent forecasts for the remaining spring harvest will be hampered by excessive rainfall. As far as I’m concerned the World export market remains highly competitive and if the US wants to maintain what market share it has further rallies will hurt that demand.

Interior basis levels for SRW continue to show a firm tone. Interior basis levels for HRW appear to be slipping. Chgo spreads were mostly steady upfront while gaining ground on the new crop. KC spreads had a similar look. I’m told cash wheat movement remains slight.

Flat price wheat remains firmly entrenched in a downtrend despite the recent 2-day rally. The mid-$4.70’s should be viewed as initial resistance for Dec Chgo while the same can be said for the mid-high $3.90’s for Dec KC.

Daily Support & Resistance for 09/06

Dec Chgo Wheat: $4.60 – $4.72

Dec KC Wheat: $3.89 – $3.99

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.