Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 5 ¼ cents lower ($5.60), May 3 ¼ cents lower ($5.59 ¼) & July 2 ½ cents lower ($5.58 ¾)

March KC Wheat closed 6 cents lower ($4.73 ¾), May 5 ¾ cents lower ($4.81) & July 5 ½ cents lower ($4.88 ¼)

March Mpls Wheat closed 6 ¾ cents lower ($5.29 ½), May 6 ½ cents lower ($5.40) & July 6 cents lower ($5.49 ¼)

USDA suggests planted wheat acres in the US for 2020-21 at 45.0 million

Weekly Wheat Export Sales – old crop expected at 400-650 K T. – new crop expected at 0-50 K T.

Chgo wheat continues to trade inside of Tuesday’s sharp rally. Today’s USDA acreage projection I thought was a non-event. It will be interesting to see their demand ideas tomorrow morning considering the EU’s winter wheat acreage is off noticeably from last season. The weather over the next couple of months will go far in determining the success or failure of our winter crop. Don’t forget that US winter wheat acreage is at a decades’ low.  The strength of US Dollar will continue to be a major stumbling block as it nears levels not seen for almost three years.

Advertised basis levels for US interior wheat continue to run unchanged. This holds true for export values as well. Spreads in Chgo saw some noticeable easing. I will attribute this to long liquidation ahead of tomorrow’s option expiration as well as next week’s 1st notice day. If you notice I touted some of the spread strength in corn and beans due to short covering and now spread weakness in wheat due to long liquidation. Go look at the funds’ stance in these markets; they’re short soybeans and corn while being long wheat.

The high in March Chgo wheat the other day was $5.70. That level correlates with the neckline of the topping formation made in mid to late January. Going forward it would not surprise me to see some sort of a new trading range develop as we watch how the winter crops develop not only in this country but abroad as well. March KC wheat is not as volatile when compared to the Chgo market. I can make a case that KC wheat is locked in a 45 cent trading range; roughly $4.45 on the downside and $4.90 on the upside (March).

Daily Support & Resistance – 2/21

March Chgo Wheat – $5.50 – $5.70

March KC Wheat – $4.65 – $4.82

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.