Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 11 cents higher ($5.00 ¼), March 11 ¼ cents higher ($5.07 ¾) & July 10 ¼ cents higher ($5.16 ½)

December KC Wheat closed 8 cents higher ($4.10 ¼), March 7 ¼ cents higher ($4.24 ¼) & July 7 ¼ cents higher ($4.44 ¼)

December Mpls Wheat closed 5 cents higher ($5.49 ½), March 4 ½ cents higher ($5.57) & July 5 ½ cents higher ($5.74 ¾)

Egypt announces an overnight tender for optional origin wheat – overnight Egypt buys 295.0 K T. – 180.0 K T. Russian, 115.0 K T. Ukraine – last week they paid $219.35 for just one cargo; now they paid $220.41 to $222.61 for 6 cargoes

Flat price wheat moves higher from the resumption of the idea we may lose “spring production of what’s left to harvest in N. Dakota and Montana as well as what’s left in the Canadian Prairies. The US market also got a boost from the overnight Egyptian tender. Last week Egypt only took one cargo due to the idea offerings were too high. Offers were even higher on this tender and Egypt paid up signaling that maybe prices were not too high after all. In recent days there has a bean a great deal of discussion that World wheat prices have made a seasonal low. On Thursday the USDA will update just supply-demand since supply updates were made just last week. Trade ideas are not calling for much of change in carryout projections; maybe a touch lower in both the US and World.

Advertised basis levels for SRW standard protein remain unchanged. Basis levels out of Oklahoma for HRW are reading higher. I’m not seeing any changes to speak of with the export basis for either SRW or HRW. Nearby spreads eased a bit in the upfront of the Chgo market while the year to year spreads did improve. KC spreads were stronger when the Dec contract was involved while the March forward KC spreads ran mostly steady.

Prior to today’s price action wheat charts were starting to look rather iffy. Today’s price action blew that idea out of the water. Dec Chgo gives us the best price we have seen since the rally started on Sept 1st as well as the best close since that date. In recent days I was thinking the KC market was in the process of rolling over; today’s outside day with a close above the three previous days squelched that idea. I’m not wild about chasing today’s rally but I’m thinking maybe I should adjust my recent bearish attitude especially if N. America is looking at a noticeably reduced HRS crop.

Daily Support & Resistance for 10/09

Dec Chgo Wheat: $4.95 – $5.10

Dec KC Wheat: $4.06 – $4.16

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