Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 4 cents lower ($5.07), March 3 ½ cents lower ($5.13 ¼) & July 2 ¼ cents lower ($5.22 ¼)

December KC Wheat closed 4 ½ cents lower ($4.21 ¼), March 3 ½ cents lower ($4.34 ¼) & July 3 cents lower ($4.53 ¼)

December Mpls Wheat closed 6 ½ cents lower ($5.45 ½), March 6 ¾ cents lower ($5.59 ½) & July 5 cents lower ($5.77)

Weekly Wheat Export Inspections – 462.6 K T. vs. 300-600 K T. expected

Egypt announces an overnight tender for optional origin wheat

Weekly Winter Wheat Progress – Planted – 65% vs. 66% expected vs. 65% 5-year average – Emerged – 41% vs. 40% 5-year average

Weekly Spring Wheat Progress – Harvested – 94% vs. 94% expected vs. 100% 5-year average

Part of the hype behind the recent rally was the idea of lost spring wheat bushels in the northern Plains and the Canadian Prairies yet the Mpls market (HRS) was your downside leader today. Weekly wheat export inspections were deemed no big deal as they came in at midrange of expectations. It looks like the run higher with European and Black Sea wheat prices is taking a breather. Since the US market is a follower it makes sense that we saw lower prices today in lieu of the overseas price action. It will be interesting to see what kind offers Egypt gets at their overnight tender. Last week accepted offers ran about $2.00-$2.50 per ton higher vs. the previous week. The big question is whether or not they will bite at yet even higher offers on this tender.

The advertised basis for standard protein SRW continues to run unchanged. The same holds true for SRW at the Gulf. Chgo spreads saw some easing with the flat price selling. Overall Chgo spreads continue with an erratic trend higher. Interior basis levels for HRW continue to run steady to firm. Export basis levels follow in a similar fashion. The KC spreads continue to trend higher in a very orderly fashion.

If you believe in channels on price charts Yesterday’s high in Dec Chgo wheat bumped up against the resistance line of its current higher channel. As much as I am disbelief with the current rally today’s minor backing and filling does nothing to damage the current uptrend. As of this writing wheat charts show lots of congestive type support 5-10 cents lower from current values. The Dec KC wheat picture is very similar other than its well defined channel higher is not as steep when compared to Chgo. Tomorrow’s trade will take its cue from the Egyptian tender; what kind of offers and what prices they are willing to pay.

Daily Support & Resistance for 10/16

Dec Chgo Wheat: $5.00 ($4.96) – $5.16

Dec KC Wheat: $4.16 ($4.12) – $4.30

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.