Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 6 ¼ cents lower ($5.09 ¾), March 5 ½ cents lower ($5.16 ¼) & July 5 ¼ cents lower ($5.25 ¾)

December KC Wheat closed 3 cents lower ($4.23), March 3 ¼ cents lower ($4.35 ½) & July 3 ¼ cents lower ($4.53)

December Mpls Wheat closed 7 cents lower ($5.24 ¼), March 6 ¾ cents lower ($5.41 ¼) & July 6 cents lower ($5.60 ½)

Weekly Wheat Export Inspections – 293.6 K T. vs. 450-700 K T. expected

Weekly Winter Wheat Condition & Progress – 57% GE (+1%) vs. 56% expected vs. 51% year ago – Planted – 89% vs. 91% expected vs. 88% 5-year average – Emerged – 71% vs. 74% 5-year average

Egypt announces an overnight tender for optional origin wheat – will Russian prices ease from last week’s offerings that were rejected

A stronger US Dollar and lower competitor prices has US wheat futures giving back a good portion of last Friday’s rally. If the competition’s prices are going lower US prices will go lower as well. Despite running above last year’s export inspection pace by nearly 2.0 M T. today’s wheat export inspections are not going to give anyone any warm & fuzzies. I know Australia is once again dealing with drought issues that are pushing productions numbers to near ten year lows. The size of the Argentine crop appears to edging lower as well. Despite all this I’m told wheat from Australia into Southeast Asia is cheaper vs. Russian origin. Ukraine wheat prices continue to undercut Russian prices as well. This tells me that if Russia wants to continue to be the big dog in World wheat exports their prices will have to come down. Russia had a great season for production; it doesn’t do them any good to sit on it.

Chgo spreads ease with the flat price selling. Advertised basis levels for SRW run unchanged. I’m told it’s a little bit different in KC. It seems low protein wheat has attracted a bid; is this feed wheat having to compete with the lower corn prices? KC spreads firmed ever so slightly.

Despite Friday’s price action suggesting an interim buy signal follow through on Monday was nowhere to be seen. It has been my idea that as move forward into our winter months US wheat futures are going nowhere fast. Because it is my belief that US wheat is a secondary market to the World’s export circles our prices will remain range bound going nowhere of substance (that means higher or lower).

Daily Support & Resistance for 11/05

Dec Chgo Wheat: $5.04 – $5.17

Dec KC Wheat: $4.16 – $4.28

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.