Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 4 ½ cents lower ($5.05 ¾), March 3 ¾ cents lower ($5.10 ½) & July 4 ¼ cents lower ($5.19 ¾)

December KC Wheat closed 1 ¼ cents higher ($4.22 ¾), March ½ cent lower ($4.30) & July 2 ½ cents lower ($4.43)

December Mpls Wheat closed 3 ¼ cents lower ($5.15 ¼), March 3 ¾ cents lower ($5.31 ¼) & July 3 ¾ cents lower ($5.50 ¾)

Weekly Wheat Export Inspections – Delayed until Tuesday, Nov 12th

Weekly Winter Wheat Crop Condition & Progress – Delayed until Tuesday, Nov 12th

On Friday the USDA cut US production by 42 million bu. but then cut usage by 12 million bu. All we did with the USDA data was to reverse the carryout increase we saw in October back to levels we saw in September. Global supply, however, continues to increase. As far as I’m concerned the changes we saw with the USDA data and the following price performance highlights the fact the US is a secondary market to the World. With that said European prices have been easing as has Russian prices. Since we (the US) are a follower we have to ease as well.

The SRW interior wheat basis runs unchanged but with a firm undertone. This holds true for SRW at the Gulf. Chgo spreads however were under pressure related to the flat price selling. The interior HRW basis is firm along with its export basis. Movement for both varieties remain quite slow. As we draw closer to December 1st notice day I expect spreads to firm as we have quality issues at play. In September HRW had to be delivered against Chgo and now those certs are no longer around.

The Chgo wheat charts look very suspect; vulnerable to the downside. KC Wheat charts are favoring more of sideways mode. I continue to be mistrusting of the US wheat futures as to sustaining any upside potential. If US wheat futures are indeed going into a long drawn out sideways mode it would suggest we are going to challenge the proposed bottoms that were completed in September. If true US wheat futures are looking at another 15-25 cents lower from current levels (longer term).

Daily Support & Resistance for 11/12

Dec Chgo Wheat: $5.00 – $5.15

Dec KC Wheat: $4.15 – $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.