Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 3 ½ cents higher ($5.15 ½), March 3 ½ cents higher ($5.18 ¾) & July 2 cents higher ($5.23 ¼)

December KC Wheat closed ¼ cent higher ($4.26), March 1 ¼ cents higher ($4.33) & July 1 ¼ cents higher ($4.46 ¾)

December Mpls Wheat closed 2 cents lower ($5.01 ¼), March 2 ¾ cents lower ($5.15 ½) & July 2 ¾ cents lower ($5.36)

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

There has been a fair amount of World wheat business happening and that has our competitors wheat prices standing in. Granted it doesn’t look like the US is getting much business but it does have US prices standing in. In the past few days I’ve been told that certain varieties of US wheat, HRW in particular, have become price competitive. Adding to that is the lack of milling quality SRW which in turn is keeping Chgo spreads firm. Last but not least is the idea the trade is favoring the inter-market spreads involving long wheat (Chgo & KC) and short everything else.

Not much happens with the advertised interior cash wheat basis levels; if anything the HRW maybe easing just a touch. Gulf basis for both SRW and HRW appear mostly steady. The nearby Chgo spreads continue to show a steady to firm bias while the nearby KC spreads ease just a bit. Deliveries against both of these contracts start late next week; it should be very interesting to see how they pan out given that back in September HRW had to be delivered against the Chgo contract and I’m not sure that availability is still around.

As far as I’m US wheat futures are in the midst of a very broad trading range affair. The short term bias is trying to read higher stemming from Monday’s suggested reversal in the Chgo market. Chgo wheat is definitely the leader followed by KC while the Mpls market brings up the rear. I’m not a “wheat head” and I don’t know what to do with it but Mpls is trading at a discount to Chgo for the first time dating back to the 4th quarter of 2007.

Daily Support & Resistance for 11/21

Dec Chgo Wheat: $5.06 – $5.22

Dec KC Wheat: $4.18 – $4.34

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.