Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 9 ½ cents higher ($5.62 ¼), May 9 cents higher ($5.65 ¼) & July 8 ¾ cents higher ($5.67 ¼)

March KC Wheat closed 10 ¼ cents higher ($4.90 ¼), May 10 cents higher ($4.97 ¾) & July 9 ½ cents higher ($5.05 ¼)

March Mpls Wheat closed 4 ¼ cents higher ($5.52), May 3 ¾ cents higher ($5.60 ½) & July 3 cents higher ($5.67 ¼)

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

It was pretty apparent that the trade doesn’t care what the USDA may have to say tomorrow – they’re bullish based on today’s price action. World prices continue to be strong and underlying that is the shaky start to the winter crops worldwide. The idea is that US acreage will continue to decline, EU acreage will decline and Black Sea conditions are questionable and how much further will the Australian crop get cut.

The average trade guess for the US wheat projected carryout is 969 million bu.; down 5 million bu. from December – The average trade guess for the projected World wheat carryout is 287.32 M T.; down 2.18 M T. from December – the average trade guess for the US wheat Dec 1st  quarterly stocks is 1.917 billion bu.; down from 2.009 billion bu. year ago – The average trade guess for US winter wheat acreage is 30.664 million acres; down 495 K year ago.

The interior HRW basis is showing signs of easing. I have to think the recent rally has attracted some movement. The Gulf basis for HRW continues to stand in. Despite the easing interior basis KC spreads improved fractionally on the day. I’m not seeing any changes in the advertised interior SRW basis for standard protein. The Gulf runs unchanged as well. Overall the SRW basis continues to show a firm bias especially for quality. Spreads in Chgo firmed along with the flat price.

March Chgo wheat is geared up once again to take a run at its summer high, $5.73 ½. If that level is eclipsed $5.90 is the next level of resistance. The most recent attempt to correct measures to just shy of the $5.90 level. The recent high for March KC wheat is $4.96 ¾; made last week. If that level is eclipsed we’ll look at something closer to $5.10. The most recent attempt to correct measures to $5.24. Everything will turn sour if we close below yesterday’s lows in both Chgo and KC.

Daily Support & Resistance for Jan 10th   

March Chgo Wheat: $5.50 – $5.74 (?)

March KC Wheat: $4.78 – $5.05

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