Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 2 ¼ cents lower ($5.09 ¼), March 2 ½ cents lower ($5.15) & July 2 ¾ cent lower ($5.24 ½)

December KC Wheat closed ¾ cent lower ($4.18 ¼), March 1 cent lower ($4.30 ½) & July 2 cents lower ($4.47 ¾)

December Mpls Wheat closed 2 ¼ cents lower ($5.23 ½), March 2 ¼ cents lower ($5.38 ¾) & July 1 ¼ cents lower ($5.56 ¾)

Weekly Wheat Export Sales – old crop vs. 200-500 K T. expected – new crop vs. none expected

The recent price action in the US wheat futures still looks like liquidation to me. It is my idea that Russian prices are too high as evidenced by Egypt not opting for any Russian origin the other day. European wheat prices appear to be stumbling for the past couple of days. If Russia wants to continue to “be the man” leading the world in exports he will have to lower his prices to maintain market share. The Egyptian tender showed them they are not the only game in town. Granted the US continues to play second fiddle in the world export markets it does us no good to try and compete with European and Russian prices. We need to have prices staying competitive with our “captive” audiences if we are to have any business at all.

The interior basis markets for SRW remain quiet. That holds true for its respective export market. Chgo spreads showed some fractional improvement but that is a result of a quality issue. The interior basis for HRW has an underlying firm tone as does its export market. I’m told there is just no hard wheat moving and that prompts the firm undertone. KC spreads saw fractional improvement out to the new crop.

About three weeks ago $5.00 to $5.05 was considered resistance for December wheat. We powered through that level up to $5.35. We have now sold back down to the previous resistance level. I’m thinking that this level should provide some interim support. The same can be said for Dec KC wheat at the $4.15 to $4.10 level. What was once resistance and then taken out becomes support at least when initially tested. It is my thought that wheat prices will develop into a trading range affair for a good portion of the winter. I believe we are beginning that development.

Daily Support & Resistance for 10/31

Dec Chgo Wheat: $5.04 – $5.16

Dec KC Wheat: $4.13 – $4.27

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.