Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 4 ¼ cents lower ($5.43 ¼), March 6 ½ cents lower ($5.35 ¼) & July 4 cents lower ($5.38 ¾)

December KC Wheat closed 1 ½ cents lower ($4.37 ¼), March 7 ¾ cents lower ($4.39 ¼) & July 7 ¼ cents lower ($4.54)

December Mpls Wheat closed 5 cents lower ($4.89 ½), March 4 ¾ cents lower ($5.09 ¾) & July 4 ¼ cents lower ($5.28 ½)

Weekly Wheat Export Inspections – 246.9 K T. vs. 400-600 K T. expected

Egypt announces an overnight tender for optional origin wheat – as of this writing French and Ukraine origin appear to be the cheapest

Despite the continued lack of deliveries against the Chgo wheat contract profit taking hit the flat price. This seems to be a bit of trend with the recent rally; really strong one day followed by backing and filling the next day. Yes, the bull spreads were working but it did not offset the selling into the last week’s late rally. The KC market saw a similar scenario; flat price attracting selling while the bull spread was working. After two days of deliveries the KC December contract is seeing the same 11 contracts being bounced around. Weekly export inspections were worse than feeble. Then again we’re not trading export disappearance here but rather following our competition overseas (where the majority of the world’s business is taking place).

The interior advertised SRW basis for standard protein runs unchanged. This holds true for SRW at the Gulf. The interior HRW basis for standard protein runs steady to better. The nearby spreads (Dec/March) in both Chgo and KC will continue to take their cue from deliveries. The March forward spreads ran softer on the day as a result of the flat price selling.

On November 18th Chgo wheat made an interim low. Days of sharp advances are followed by 2-3 days of consolidation. Based on today’s activity following Friday’s sharp rally it looks like that MO is continuing. The results of the overnight Egyptian tender should give us some idea If we are to see yet higher prices or are we high enough for the time being.  Remember – the US wheat market is a “following” market, not a “leading” market.

Daily Support & Resistance for 12/03

March Chgo Wheat: $5.28 – $5.46 (?)

March KC Wheat: $4.34 – $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.