Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 15 ¼ cents higher ($5.48 ¾), July 13 ¾ cents higher ($5.47 ½) & Dec 12 cents higher ($5.59)

May KC Wheat closed 16 ½ cents higher ($4.95 ¼), July 17 cents higher ($5.02 ¼) & Dec 16 ½ cents higher ($5.18)

May Mpls Wheat closed 4 cents higher ($5.10 ¾), July 3 ½ cents higher ($5.23) & Dec 4 cents higher ($5.46)

Weekly Wheat Export Inspections – 469.9 K T. vs. 400-700 K T. expected

Russia threatens to shut down exports if its 7.0 M T. quota is met. Many believe this could happen in less than one month’s time. Russia was closed to today for orthodox Easter. French wheat prices soared today from anticipation that demand could further improve if the Black Sea gets shut down. Also the condition of the French winter wheat crop is the worst it has been in many years for the current time frame. Realize that the recent rally has nothing to do with the US wheat situation. This is all about wheat prices from our exporting competitors. This afternoon the USDA updated the US winter wheat ratings. They went from 62% GE to 57% GE. Trade expectations were for only a 1% reduction in conditions. The USDA went on to say that 7% of the intended spring wheat crop has been planted vs. the 5 year average of 18%. The trade had been expecting to see 11% planted.

The interior wheat basis shows Toledo reaching SRW as it improves its basis by 10 cents. That has to suggest no SRW deliveries against the May contract. Basis levels elsewhere run unchanged and this holds true for HRW as well. Chgo spreads firmed all the way out to July 2021. KC spreads ran mixed upfront but with a firming bias as time went on.

Will Russia stop exporting wheat? Will French wheat conditions continue to deteriorate? Will US wheat conditions continue their slide that just started? We know US wheat acres are down. We know EU acres are down. Over the weekend a Russian Ag agency cut their new crop wheat projections by 2.0 million T. Three days ago wheat charts were looking rather iffy. Since then the turn around is almost astounding. I have to think the rally of the last two days still has some oomph to it. As I said the other day – its “herd mentality” from the fund sector – they rush in, then they rush out. Currently they are rushing back in.

Daily Support & Resistance – 4/21

July Chgo Wheat – $5.39 – $5.55

July KC Wheat – $4.94 – $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.