Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 15 ¾ cents higher ($5.31), March 14 ¼ cents higher ($5.33) & July 12 cents higher ($5.36)

December KC Wheat closed 11 ½ cents higher ($4.35 ½), March 12 cents higher ($4.45 ¼) & July 11 ¾ cents higher ($4.59 ¾)

December Mpls Wheat closed 5 ½ cents higher ($4.98 ¼), March 6 ¼ cents higher ($5.13) & July 4 cents higher ($5.30 ¾)

Weekly Wheat Export Inspections – 420.8 K T. vs. 300-500 K T. expected

Weekly Winter Wheat Condition – 52% GE (unch) vs. 51% expected vs. 55% year ago –

Higher EU and Black Sea wheat prices influence US wheat futures higher. The EU has concerns about too wet, the Black Sea has concerns of too dry and the US has concerns over the wintering conditions of its wheat crop. Questions around the US winter wheat crop range from will we get the all of the SRW intentions planted to the condition of the HRW. Adding to the strength of the Chgo market is the idea we may not see any deliveries on Friday due to the ongoing quality concerns. In September HRW was delivered against the Chgo contract. I’m not sure we have the availability of HRW to do that again.

Advertised wheat basis levels, both for domestic and for export, run unchanged on the day. Chgo spreads continue to tighten while the nearby Dec/March in KC eases fractionally. March forward KC spreads ran steady to fractionally better.

It is not saying a whole lot but March Chgo wheat appears headed to the $5.40 level; the interim high we saw in October. After that we’ll look at the mid-low $5.50’s. The March KC market is not as strong looking but should follow to a lesser extent. Closes above the $4.50 level will strongly suggest another 20-25 cent advance.  Just be careful of chasing the rally as flat price wheat is notorious for fading when short term inter-day extremes develop.

Daily Support & Resistance for 11/26

March Chgo Wheat: $5.26 – $5.40

March KC Wheat: $4.38 – $4.50

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.