Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed ¾ cent lower ($5.68 ¾), July 4 ¼ cents higher ($5.62 ½) & Dec 6 cents higher ($5.72 ¾)

May KC Wheat closed 6 ¼ cents higher ($4.93), July 6 ¾ cents higher ($4.99 ½) & Dec 7 ½ cents higher ($5.18 ¼)

May Mpls Wheat closed 4 ½ cents higher ($5.39 ¼), July 3 ½ cents higher ($5.48) & Dec 3 ½ cents higher ($5.67 ¼)

USDA Wheat Quarterly Stocks – 1.412 billion bu. vs. 1.432 expected vs. 1.593 year ago

USDA Prospective Wheat Plantings – All Wheat – 44.655 million acres vs. 44.982 expected vs. 45.158 year ago – Winter Wheat – 30.755 million acres vs. 30.900 expected vs. 31.159 year ago – Other Spring – 12.830 million acres vs. 12.631 expected vs. 12.660 year ago

Quarterly wheat stocks were deemed friendly based on expectations. Acreage estimates were also deemed friendly based on expectations. These reports coupled with the competitors’ enacting export quotas allowed US wheat futures to stay firm. The one exception was the May Chgo futures as it lost noticeably on the spread. I’m thinking this is in response to a softening cash market for SRW. The bigger play/focus is becoming the new crop. So far the US winter crop remains in decent shape.

Interior basis levels suggest a softening SRW while the HRW runs unchanged. Both varieties are seeing a softening export market. In recent days there has been a fair amount of global trade but it appears the US is not getting much of it. Spreads in Chgo were noticeably softer upfront while the forward spreads were firm. The same type of scenario was seen in KC.

After today’s trade it looks like the spec longs in wheat are not willing to give up the ship. July Chgo wheat looks like it wants to test the recent interim high, $5.71-$5.72. July KC wheat looks like it wants to take another look at the $5.10 level.

Daily Support & Resistance – 4/01

July Chgo Wheat – $5.52 – $5.74

July KC Wheat – $4.85 – $5.10

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.