Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 4 ¼ cents higher ($5.29), July 5 cents higher ($5.22 ½) & Dec 4 ½ cents higher ($5.33 ½)

May KC Wheat closed 1 cent higher ($4.77 ½), July 1 ¼ cents higher ($4.78 ¾) & Dec 1 ¾ cents higher ($4.97)

May Mpls Wheat closed unchanged ($4.98 ¼), July 3 ¼ cents higher ($5.11) & Dec 3 cents higher ($5.34 ¾)

Weekly Wheat Export Sales – 244.8 K T. old crop vs. 50-300 K T. expected – 135.3 K T. new crop vs. 100-350 K T. expected

Canadian Wheat acreage is expected to rise by 400 K acres vs. year ago

Wheat futures started the day looking like they were ready to rock and roll higher but unfortunately as the day went on a good portion of that strength faded away especially in the KC market. The rationale for the early strength were the frost/freeze warning for later this weekend. The idea has become that whatever frost/freeze materializes the HRW areas are to see the least impact if any. It’s the SRW crop areas that may be impacted leading to Chgo gaining on KC. Weekly export sales were disappointing (surprise surprise). Looking ahead to next week’s USDA data – no material changes are expected in the old crop data, US or World. The wild card will be the new crop data especially the World data (just my opinion). It will be interesting to see how the USDA factors in the lower EU acreage as well as how the dry spring impacted that crop as well as the Black Sea crop.

Advertised interior basis levels for standard protein wheat run unchanged. The Gulf HRW basis appears to be a bit easier. Chgo spreads had a fractional bullish bias while KC spreads had a fractional bearish bias.

Early in the day July Chgo wheat was trying to suggest an interim buy signal. The close however lacked conviction. July KC wheat appears stuck between $4.70 and $4.90. It’s my opinion that the spec trade wants to be long but as of this writing the market just doesn’t have enough to provide the impetus for follow through buying. Hopefully the USDA data will offer a clearer picture.

Daily Support & Resistance – 5/08

July Chgo Wheat – $5.15 – $5.30

July KC Wheat – $4.72 – $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.