Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 10 ¼ cents higher ($5.29 ¾), July 7 ¾ higher ($5.24 ¼) & Dec 5 ¾ cents higher ($5.36 ¼)

May KC Wheat closed 14 ½ cents higher ($4.82 ¼), July 11 cents higher ($4.88) & Dec 10 ½ cents higher ($5.05 ¼)

May Mpls Wheat closed 8 ½ cents higher ($5.00 ½), July 8 cents higher ($5.15 ½) & Dec 6 ¼ cents higher ($5.38 ½)

Weekly Wheat Export Sales – 467.4 K T. old crop vs. 100-300 K T. expected – 155.1 K T. new crop vs. 100-350 K T. expected

Long liquidation continued in the early hours for July Chgo wheat before short covering set in. The day’s low represented a challenge of the March mid-month interim low. July KC wheat held its interim trading low, $4.70, before new buying surfaced. Old crop weekly export sales were noticeably better than expected.  A lack of deliveries against Chgo and just a handful against KC lent support. The recent scenario behind the US wheat markets has not changed – beneficial moisture for the dry areas of the EU and forecasts suggesting better moisture for the Black Sea winter wheat areas. Not that many people pay attention to the IGC (International Grains Council) but they did lower 2020/21 world wheat production by 4.0 M T. to 764 M T. from their previous estimate. Note this production figure is only 460 K T. less than this past season’s crop total.

Upfront basis levels for standard protein are not showing any changes. The export basis for SRW appears to be unchanged and the HRW export basis appears to be easing. I can’t help but notice that new crop export basis levels are easing. The May/July spreads were both strong in the Chgo and KC due to the lack of deliveries. July forward spreads saw minor improvement but I have to think a large portion of that is tied to the day’s speculative short covering.

As we move forward into the month of May daily direction will take its cue from assessments as to how the winter crop moves into its final stages of development. This holds true for both the US crop as well as the crops from our overseas competitors. For the short term we’ll see if today’s rally was anything more than short covering.

Daily Support & Resistance – 5/01

July Chgo Wheat – $5.16 – $5.31

July KC Wheat – $4.80 – $4.96

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.