Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 24 cents higher ($5.66 ¾), May 23 ½ cents higher ($5.65) & July 21 ½ cents higher ($5.62 ½)

March KC Wheat closed 20 ¼ cents higher ($4.85 ¾), May 20 ¾ cents higher ($4.93) & July 21 ¼ cents higher ($5.00)

March Mpls Wheat closed 14 ½ cents higher ($5.40), May 14 cents higher ($5.49 ½) & July 14 cents higher ($5.57 ½)

Weekly Wheat Export Inspections – 502.0 K T. vs. 400-600 K T. expected

Zoom, Zoom, Zoom!!! Over the weekend China news runs a “what if” article on the possible ramifications of what would happen if the swarm of crop eating locusts currently in east, northeast Africa would make it to the southwestern reaches of China. The reaction on the Dalian exchange was sharply higher wheat prices. It is my opinion that started the initial rally. Then came the news that the Australian wheat crop had been lowered another 700 K T. Following that was a list of global wheat business currently happening and it’s a fair-sized amount (example; Morocco looking for 350 K T. of US durum). Then came China announcing they will lower tariffs on 696 US items (no details). Additional technical buying was realized when it became apparent that last week’s resistance level, $5.50 CBOT March, was going to act as new support. Weekly wheat export inspections came in at midrange of expectations.

Advertised basis levels for the domestic US wheat varieties continue to see little change. The SRW basis continues to be quite strong. Export basis levels for the different varieties continue to run steady with recent postings. Chgo spreads are trying to rebound after last week’s early sell off. KC spreads continue to flatline meaning sideways.

After today’s sharp rally short term inter-day technical indicators read over bought. Daily technical indicators do not. It will be interesting to see what kind of downside correction we see on Wednesday. Despite the news that reads positive for US wheat the strength of the US Dollar remains a major stumbling factor.

Daily Support & Resistance – 2/19

March Chgo Wheat – $5.60 – $5.75

March KC Wheat – $4.76 – $4.92

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.