Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 11 ¼ cents higher ($5.17), March 11 ¼ cents higher ($5.21 ¾) & July 10 ½ cents higher ($5.30 ¼)

December KC Wheat closed 16 cents higher ($4.38 ¾), March 15 ½ cents higher ($4.45 ½) & July 15 cents higher ($4.58)

December Mpls Wheat closed 6 ½ cents higher ($5.21 ¾), March 5 ¾ cents higher ($5.37) & July 5 ¼ cents higher ($5.56)

Weekly Wheat Export Inspections – 528.8 K T. vs. 300-500 K T. expected

Weekly Winter Wheat Crop Condition & Progress – 54% GE (-3%) vs. 57% expected vs. 54% year ago – Planted – 92% vs. 93% expected vs. 92% 5-year average – Emerged – 78% vs. 81% 5-year average

Big time short covering is featured in the KC wheat on Tuesday while Chgo follows and Mpls brings up the rear. Cash wheat continues to tighten from slow movement. Quality issues are not going away anytime soon. I have to think the single digit temps in the US Southern Plains would be impacting the recently emerged winter wheat.  Weekly export inspections were looked on favorably as it was noted China taking one load of US wheat off of the PNW (either HRS or white). It was one of those rare moments that US prices was the upside leader of the World wheat markets. I doubt this can continue as US origin remains uncompetitive in the World export circles.

The interior basis for both SRW and HRW remain firm; HRW the firmer of the two. Gulf prices appear to be easing for SRW while HRW export values remain strong. I can’t call basis values strong from demand but more so from slow movement and quality issues. We know a good portion of this past season’s SRW crop took a beating with its quality. In September HRW had to be delivered to satisfy Sept CBOT futures. Those receipts are no longer available. I have to think spreads will continue to be biased to improve considering the quality issues.

Today’s price activity took Dec KC futures out of mediocrity and put them back on track to test the suspected resistance at $4.50. If Chgo futures are going to follow expect to see the Dec contract test the $5.40 level. The “however” to that is that they first need to get above last week’s interim high of $5.22.

Daily Support & Resistance for 11/13

Dec Chgo Wheat: $5.10 – $5.24 ($5.28)

Dec KC Wheat: $4.32 – $4.45

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.