Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 3 ¼ cents lower ($5.44 ¼), May 3 ¾ cents lower ($5.44 ¾) & July 4 ½ cents lower ($5.44 ½)

March KC Wheat closed 5 cents lower ($4.66), May 4 ½ cents lower ($4.72 ¾) & July 4 ½ cents lower ($4.79)

March Mpls Wheat closed 4 ½ cents lower ($5.26 ¾), May 4 ¼ cents lower ($5.36 ¼) & July 4 ¾ cents lower ($5.44 ¼)

Weekly Wheat Export Sales – 643.1 K T. old crop vs. 300-650 K T. expected – 44.0 K T. new crop vs. 0-50 K T. expected

Weekly wheat export sales were solid based on expectations. Despite this flat price wheat was unable to sustain Wednesday’s attempt at reversing Tuesday’s suggested sell signal. World wheat markets continue to show a softening bias. With the exception of the Chgo March contract US wheat futures will remain tied to the direction of exporter competitions’ prices. It is my thought March Chgo wheat will enter a world of its own as we draw closer to 1st Notice day due to the issues surrounding the lack of quality SRW and its impact on CBOT deliveries.

Advertised interior wheat basis levels hold steady with recent postings. The underlying tone remains firm due to slow movement. The export basis, however, looks like it is waffling from recent strength. Chgo spreads bounce back from the sell off seen earlier this week while KC spreads continue to flatline. If you’re asking what flatline means; the March/July KC spread has traded between a 16 cent carry and a 12 cent carry dating back to early November.

March Chgo wheat tries to reject Tuesday’s suggested sell signal and fails to do so. Closes below $5.40 should attract additional spec liquidation. If this happens we’ll look at the $5.33 level for potential support. March KC wheat is not as ominous looking as its Chgo cousin. I think it has been getting some left-handed support from the liquidation of the inter-market spreads featuring long Chgo. $4.56 looks it will be the next “make it of break it” level for this contract.

Daily Support & Resistance – 2/14

March Chgo Wheat – $5.33 – $5.49

March KC Wheat – $4.60 – $4.75

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.