Wheat Commentary

storck

Wheat – Just My Opinion

March Chgo Wheat closed 6 ½ cents lower ($4.60), May 4 ½ cents lower ($4.68 ¼) & July 2 ½ cents lower ($4.75 ¼)

March KC Wheat closed 6 ½ cents lower ($4.35 ¾), May 6 cents lower ($4.44 ¼) & July 4 ½ cents lower ($4.55)

The spiral lower continues!! World export prices continue to come down and that weighs on US prices. Monday the USDA issued some selected winter wheat ratings. From last November’s posting most states saw declines in conditions (sans Kansas). What I thought weighed on the market was the idea that winter wheat conditions were noticeably better vs. one year ago. Better ratings this year, if they continue, could go far in offsetting the lower acres. Concerns are starting to develop around the timely planting of spring wheat. Its been so cold and there is such a snowpack in many of the spring areas a perfect spring will be needed to provide timely planting as well as planting conditions. I think that’s why the Mpls market was able to buck to lower price action seen in the “winter” markets.

Interior cash wheat markets ran unchanged vs. Monday but still maintaining a relatively firm bias. The export basis for HRW continues to frim while the SRW export runs unchanged but firm also. Wheat spreads, both Chgo and KC, continue to ratchet lower buffeted by the flat price selling. To date there are only 10 receipts registered for Delivery against Chgo and only 2 against KC. That can change as late as tomorrow at 4:00 PM.

The trade ignores recent better than expected weekly export sales and inspections. The tout is the lower world prices and how the US market has to follow suit. As much as I think the break is a bit overdone I have to remind myself that markets will go lower vs. what I think reasonable. If I couldn’t sell last night’s settlement I sure can’t sell today’s settlement. It’s needless to say the price action is pretty ugly. Have we attained the “darkest before the dawn?” Trying to pick a bottom at this point is pure speculation but then again our markets are full of speculators.   

Daily Support & Resistance for 02/27

May Chgo Wheat: ??? – $4.76  

May KC Wheat: ??? – $4.53

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.