Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 8 cents lower ($5.09), March 8 cents lower ($5.13 ¾) & July 7 ¾ cents lower ($5.22 ½)

December KC Wheat closed 14 cents lower ($4.24 ¾), March 12 ¼ cents lower ($4.33 ¼) & July 11 ½ cents lower ($4.46 ½)

December Mpls Wheat closed 6 ½ cents lower ($5.15 ¼), March 7 cents lower ($5.30) & July 6 ½ cents lower ($5.49 ½)

Weekly Wheat Export Sales – Delayed until Friday, Nov 15th

On Tuesday December KC wheat closed 16 cents higher in response to the single temps in the US Southern Plains possibly impacting the recently emerged winter wheat. Today, Wednesday, Dec KC gave back 14 cents of those gains. Chgo followed as they did on Tuesday; giving back 8 cents of Tuesday’s 11 cent gains. It is my thought that it is very difficult to trade this scenario, meaning the frigid temps’ impact on the crop, this early in the season. If indeed the crop was negatively impacted we won’t be able to assess it for some time to come. In the meantime the trade will go back to focusing on world prices and how close or far away the US is to being competitive.

I’m not seeing any changes in the advertised basis for standard proteins. HRW is firmer vs. SRW for both domestic use as well as for export. Cash wheat movement is similar to that we are seeing in corn and soybeans; not much to very little at all. Chgo spreads ran steady to fractional losses while KC spreads took a much bigger hit. A good portion of the KC losses were tied to Tuesday run-up in the flat price and then giving most of it back today.

“Suck them in – blow them out” is the wheat trade of the past two days. Some will call Tuesday’s price action a “bull trap”. I’ve got to learn to stay with my original ideas – US wheat futures are going nowhere fast. As we move into the next couple of months I expect a broad sideways trade to develop. That means fading short term extremes; similar to what we saw develop in Tuesday.

Daily Support & Resistance for 11/14

Dec Chgo Wheat: $5.01 – $5.14

Dec KC Wheat: $4.16 – $4.32

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.