Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 8 ¾ cents lower ($5.23 ½), March 7 ½ cents lower ($5.29 ½) & July 6 ¼ cents lower ($5.37 ¾)

December KC Wheat closed 8 ¼ cents lower ($4.25 ½), March 7 ½ cents lower ($4.38 ½) & July 7 cents lower ($4.56)

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

Weekly Wheat Export Inspections – 565.0 K T. vs. 400-600 K T. expected

Weekly Winter Wheat Progress – Planted – 77% vs. 77% expected vs. 75% 5-year average – Emerged – 53% vs. 53% 5-year average

Weekly Spring Wheat Progress – Harvested – 96% vs. 97% expected vs. 100% 5-year average

The Sunday night rally failed to sustain itself during the Monday day session. Call it profit taking on the near 50 cent rally that occurred over the past week and a half. I did not see any one item to prompt today sell-off other than thoughts of a short term overbought. We have seen some pretty big global business over the past few days; last Wednesday Egypt bought just over 400.0 K T. and over the weekend Saudi Arabia bought just over 600.0 K T. The next big tender of focus will be Algeria; results on Wednesday. Will they be willing to pay up just as Egypt and Saudi Arabia has done?

No changes are being noted with the interior basis for either SRW or HRW. The Gulf, however, continues to show a firm tone for both varieties. It’s not because we have big business but more so the lack of quality milling wheat. Both Chgo and KC spreads were under pressure today but I think that is more of a result of the flat price selling that focuses on the nearby.

Today’s trade in Chgo wheat sees a minor downside reversal being registered. The KC price action registered a more notable downside reversal; an outside day involving new highs for the current rally and closing below the previous day’s low. Direction over the next day or two will be a result of the Algerian tender as their tender will be more focused on European prices. If European and Black Sea prices continue to stay firm US prices will have a hard time sustaining a sell-off.

Daily Support & Resistance for 10/22

Dec Chgo Wheat: $5.20 ($5.16) – $5.33

Dec KC Wheat: $4.20 – $4.34

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.