Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 1 ¼ cents lower ($4.89 ¼), March 1 cent lower ($4.96 ½) & July ¾ cent lower ($5.06 ¼)

December KC Wheat closed 1 ¾ cents lower ($4.02 ¼), March 1 ½ cents lower ($4.17) & July ¾ cent lower ($4.37)

December Mpls Wheat closed 2 ½ cents higher ($5.38 ½), March 2 ¾ cents higher ($5.52 ½) & July 1 ¾ cents higher ($5.69 ¼)

Weekly Wheat Export Inspections – 385.2 K T. vs. 400-600 K T. expected

Weekly Winter Wheat ProgressPlanted – 52% vs. 54% expected vs. 53% 5-year average – Emerged – 26% vs. 26% 5-year average

Weekly Spring Wheat ProgressHarvested – 91% vs. 94% expected vs. 99% 5-year average

Egypt announces an overnight tender for optional origin wheat – last week they took only 60 K T. when 975 K T. were offered.

If you want to be bullish wheat you’re trading the Mpls market (HRS). More bullish weather is being forecasted for the yet to be harvested in the Canadian Prairies. I have to think any impact on the US HRS crop would be minimal as most of it has already been harvested. The Chgo and KC markets dog it due to the low US export disappearance. Over the weekend a private wheat growers union in Russia suggested their crop is 75.0 M T. plus vs. recent USDA ideas of a 72.5 M T. crop. As we speak crop reductions are being dialed in for both the Australian crop and the Argentine crop. As of this writing there is a lot of talk about how seasonal lows are in for wheat. This needs to be told to the Chgo and KC markets as their recent price action is leaving a lot to be desired.

Not much change is being noted in the advertised basis for standard protein wheat. The Gulf basis for HRW is a touch firmer. I’m told cash wheat movement is minimal at best. Wheat spreads in Chgo ran fractionally softer as did wheat spreads in KC. KC intra-market spreads registered an interim sell signal last Wednesday and so far have been unable to reject it. Inter-market spreads in Chgo have a soft look but I doubt there is that much on the downside due to the ongoing issues regarding the quality of this year’s SRW crop.

It is my opinion that the Chgo and KC wheat price charts are on what looks to be shaky ground given the recent inability to advance the gains we saw one week ago. Prices may be able to sustain current levels until Thursday’s supply-demand update but given traders’ estimates around the wheat supply-demand report not much change is expected.

Daily Support & Resistance for 10/08

Dec Chgo Wheat: $4.82 – $4.98

Dec KC Wheat: $3.96 – $4.12

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.