Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 1 ¾ cents lower ($5.69 ½), July 1 cent higher ($5.58 ¼) & Dec 3 ½ cents higher ($5.66 ¾)

May KC Wheat closed unchanged ($4.86 ¾), July 1 ¼ cents higher ($4.92 ¾) & Dec 1 ¼ cents higher ($5.10 ¾)

May Mpls Wheat closed 2 ¼ cents lower ($5.34 ¾), July 1 cent lower ($5.44 ½) & Dec unchanged ($5.63 ¾)

Weekly Wheat Export Inspections – 363.8 K T. vs. 300-600 K T. expected (354.4 K T. last week)

Mixed price action in wheat futures today; higher early, lower midday and short covering late in the session. I’m still hearing of reports of export quotas from our competition. Supposedly the quota set by Russia many doubt will be attained (so what’s the point of having a quota?). With that said the rallies are partially fear based and partially from demand. The demand is for global supplies not from the US as evidenced by today’s feeble looking inspection number. Adding to the up-down-all around price action are tomorrow’s USDA reports. The “Plantings” report is expected to show all wheat acreage at 44.982 million acres, winter wheat acreage at 30.900 million and spring wheat acreage at 12.631 million. The Quarterly Stocks report is expected to show 1.432 billion bu.

Interior wheat basis levels are steady for HRW and easier for SRW. Both HRW and SRW read easier at the Gulf. Bear spreads in Chgo were working all the way out to Dec 2021. Bear spreads were working in KC as well but no where near the extent that was seen in Chgo. US futures may try to follow world prices but that doesn’t mean we’re getting any business.

The July Chgo wheat chart (Hi-Lo-Close) looks like it has been down-flagging for the past 3 days. This is not a bearish formation but with the USDA out tomorrow who knows. The July KC chart has a similar look to it. What is most interesting is that both of these charts had their current rallies finding resistance at the necklines of the tops that were established in January. The reports scheduled for tomorrow have a bit of history to be game changers. Will this time be different?

Daily Support & Resistance – 3/31

July Chgo Wheat – $5.45 – $5.77

July KC Wheat – $4.78 – $5.20

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.