Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 4 ½ cents higher ($5.26 ¾), May 3 ½ cents higher ($5.22 ¼) & July 2 ¾ cents higher ($5.21 ½)

March KC Wheat closed 6 ¾ cents higher ($4.43 ¼), May 3 ¾ cents higher ($4.44 ¾) & July 3 ¼ cents higher ($4.52)

March Mpls Wheat closed 1 ½ cents higher ($5.07 ½), May 4 ½ cents higher ($5.20 ¾) & July 4 ¼ cents higher ($5.30 ¾)

Highlights USDA Wheat Supply-Demand – US – left all data unchanged – World – decreased carryout 890 K T.

The unknown around new crop wheat, both in the US and with our global competitors, keeps prices alive. It does seem that there are a number of countries that are trying to capitalize on the recent break in prices. The recent break in the US dollar as well as the Russian ruble has made for some attractive prices. Unfortunately the US Dollar had a very nice rebound on Tuesday. The USDA report for the US domestic wheat market was deemed a non-event but then the trade wasn’t looking for anything beyond minimal changes. I did find it interesting that the USDA hiked Russian exports by 1.0 M T. as they have been rather quiet lately.

The advertised interior basis for the different varieties stays firm from slow movement. Gulf values are holding steady for HRW while the SRW is looking a bit easier. Chgo wheat spreads continue to stay firm and I think that will continue until we have a better handle on the new crop. The US cannot afford to have another poor quality SRW crop. KC spreads, May forward, regained their fractional losses from Monday. Deliveries against the March contract (lack thereof), both Chgo and KC, continue to create a bit of squeeze as these two markets go into expiration on Friday.

On Monday July Chgo wheat registered a minor upside reversal for the current down move. That suggested buy signal held true today despite midday attempts to reverse it. The July contract in KC fell shy of registering a reversal on Monday but put in a performance on Tuesday that suggests it may done going lower for the time being. It is my opinion that until we have a better handle on the new crop production, both domestically and globally, the the downside in the US wheat futures markets will remain limited.

Daily Support & Resistance – 3/11

July Chgo Wheat – $5.16 – $5.30

July KC Wheat – $4.48 – $4.60

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.