Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 1 ¾ cents lower ($5.60 ½), May 2 ¾ cents lower ($5.58 ½) & July 3 ½ cents lower ($5.57)

March KC Wheat closed 1 cent lower ($4.71), May 1 cent lower ($4.78 ½) & July 1 cent lower ($4.86)

March Mpls Wheat closed ¾ cent higher ($5.36 ½), May ¾ cent higher ($5.46) & July 1 ¼ cent higher ($5.55)

Weekly Wheat Export Sales – 646.3 K T. old crop vs. 300-700 K T. expected – 1.0 K T. new crop vs. 0-50 K T. expected

Overnight Egypt buys 180 K T. French wheat – paid $231.10 (FOB) / $246.10 (CIF) vs. $236.27 (FOB) / $249.50 (CIF) two weeks ago for 240 K T.

Weekly wheat export sales were decent while shipments were some of the weakest of the season. Egypt pays $3-$5 less vs. what they paid two weeks ago. The trade took their cue from some of the lower offers to Egypt but I could not help but notice that the Russian offers were really coming down. I have to think France was anxious to get some business done due to their ongoing port strikes as wheat has been backing up at those facilities. In the early going Chgo prices traded as much as 10 cents lower, KC prices as much as 8-9 cents lower. As the day went on prices were able to scratch and claw their way back to unchanged. Bull spreading in Chgo helped tremendously.

Interior basis levels for standard protein wheat continue to show a firm undertone. The Gulf basis runs unchanged but it too is firm. Nearby bull spreads in Chgo registered their strongest inverses to date thanks to the lack of quality SRW. KC spreads remain relatively flat.

On January 22nd March Chgo wheat saw a high of $5.92 ½; today’s low was $5.50 ¾. Is a 42 cent sell-off enough of a correction? Trend line support for March Chgo wheat comes in around the mid-low $5.40’s. Today’s break in the KC market delved into some congestive type support that ranges from $4.67 down to $4.57. It still looks like the wheat market has established some interim tops. March KC wheat features a double top against the $5.04 level while March Chgo contract scored a spike high reversal on January 22nd. There is room for some upside retracement but we still have to pay attention to the competitions’ prices.

Daily Support & Resistance for Jan 31st    

March Chgo Wheat: $5.54 – $5.66  

March KC Wheat: $4.65 – $4.78

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.