Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 6 ¼ cents higher ($5.13 ¼), March 5 cents higher ($5.19 ¼) & July 4 cents higher ($5.26 ¼)

December KC Wheat closed 3 ¾ cents higher ($4.25), March 3 ½ cents higher ($4.37 ¾) & July 2 ¼ cents higher ($4.55 ½)

December Mpls Wheat closed 5 cents higher ($5.50 ½), March 4 ¾ cents higher ($5.64 ¼) & July 2 ¾ cents higher ($5.79 ¾)

Egypt announces an overnight tender for optional origin wheat – overnight Egypt buys 405 K T. of wheat; 285.0 K T. Russian, 60.0 K T. French, 60.0 K T. Ukraine – C&F prices paid appear to be $8.00-$9.00 higher vs. what was paid on Oct 8th

Egypt is one of the biggest, if not the biggest, importer of wheat. If they are willing to pay up US prices will follow suit despite not getting any of their business. The recently weak US Dollar is also offering some left-handed support.  I am also seeing a fair amount of inter-market spreading involving buying wheat vs. selling corn and soybeans. Going forward US wheat futures will continue to follow the European and Black Sea markets.

Not much happens with the interior SRW basis. The export basis, however, is getting a small spark. SRW movement is slow as anyone that has quality is not going to let it go. Chgo spreads continue to show a firm bias. The interior HRW basis continues to run steady to firm. this holds true for its export market as well. KC spreads continue with their slow but sure trend tighter.

Flat price Chgo futures continue to grind away at suspected overhead resistance. $5.15 (Dec Chgo) on closing basis is the neckline of the proposed top that was completed in early July. The mid-low $4.30’s represents near term resistance for Dec KC. I’ve not been in step with the rally so I won’t try now to play catch up. Unless I see a double digit gain from current levels my hands will stay in my pockets. For what it is worth – I will suspect something will be amiss with the current rally if we close below today’s lows.

Daily Support & Resistance for 10/17

Dec Chgo Wheat: $5.05 – ???

Dec KC Wheat: $4.18 – $4.32

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.