Wheat Commentary

storck

Wheat – Just My Opinion

December Chgo Wheat closed 4 ½ cents higher ($5.35), March 2 ¼ cents higher ($5.27 ½) & July 1 ¾ cents higher ($5.32 ¾)

December KC Wheat closed 2 ¾ cents higher ($4.25 ¼), March 3 ¾ cents higher ($4.40 ½) & July 3 ¾ cents higher ($4.54 ¾)

December Mpls Wheat closed 2 ¼ cents higher ($4.96 ¼), March 1 ½ cents higher ($5.15) & July 1 ½ cents higher ($5.33 ½)

Weekly Wheat Export Sales – old crop vs. 300-700 K T. expected – new crop vs. none expected

The recent flip-flop of prices near our recent upper end suggests to me that the everyday wheat trader is not sure what to do. It is given we are a follower of the competition (EU & Black Sea). We’ve yet to see any deliveries against the Chgo contract and the same 11 contracts bouncing around in KC. The lack of deliveries against Chgo is not about demand but the lack of quality. Those that have quality milling SRW are not going to let it go. Direct news involving US wheat remains slight.

The interior wheat basis continues to show a firm undertone. I’m told this all about a lack of producer selling not necessarily demand. Spreads in Chgo had a firm bias from the continued lack of deliveries. KC spreads, March forward, ran unchanged on the day. The Gulf basis for both varieties runs unchanged. Basis changes at the Gulf are slow to occur; slow movement offsets no big deal demand.

Chgo wheat has yet to confirm my idea of a trading range developing as today’s low did flirt with some recently established support and the market bounced away from it. KC wheat, March contract, has traded between $4.10 and $4.50 for the past month and a half. For the time being I’ll continue to advocate fading short term inter-day extremes for short term trading opportunities.

Daily Support & Resistance for 12/05

March Chgo Wheat: $5.20 – $5.34

March KC Wheat: $4.34 – $4.46

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.