Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 7 ¼ cents lower ($5.19 ½), July 9 ½ lower ($5.16 ½) & Dec 7 ¼ cents lower ($5.30 ½)

May KC Wheat closed 6 ¾ cents lower ($4.67 ¾), July 6 ¾ cents lower ($4.77) & Dec 6 cents lower ($4.94 ¾)

May Mpls Wheat closed 7 ¼ cents lower ($4.92), July 6 ½ cents lower ($5.07 ½) & Dec 7 cents lower ($5.32 ¼)

Weekly Wheat Export Sales – old crop vs. 100-300 K T. expected – new crop vs. 100-350 K T. expected

Chgo wheat continues to liquidate not only in the flat price but also in the inter-market spreads. Beneficial rain is happening in the dry European wheat fields and is expected to move into the dry Black Sea areas. US forecasts are calling for normal moisture in the US southern Plains which has developed a minor dry bias recently. Chgo wheat takes these forecasts the hardest as this is where the large speculative players operate. The only positive spark of the day was the May/July inverting due to the idea we won’t see May deliveries unless someone decides to deliver hard wheat against this soft wheat contract. Overseas prices are also ratcheting lower. Given the overall poor feed demand feed wheat has become rather expensive vs, corn.

Advertised basis levels for standard protein wheat run unchanged in the US interior. The SRW export market remains quiet and the HRW export market continues to show a steady to firm tone despite not a lot of business showing. The US wheat export market continues to be a secondary market vs. our overseas competition.

Unless July Chgo wheat is a lot worse off than I think it is the $5.10-$5.05 level should begin to offer at least some short term support. July KC wheat has been no where near as soft but get this market much below the $4.70 level and a quick 15-20 cent spurt to the downside cannot be ruled out. Since early April July KC wheat has gained nearly 35 cents on July Chgo. A correction in the near term cannot come unexpected. What would prompt it – the current deluge of rain happening in some of our developing soft winter wheat areas.

Daily Support & Resistance – 4/30

July Chgo Wheat – $5.06 – $5.24

July KC Wheat – $4.70 – $4.87

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.