Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 2 ¼ cents higher ($5.15), Sept 3 ½ cents higher ($5.18 ¾) & Dec 4 ¼ cents higher ($5.27)

July KC Wheat closed 1 ¼ cents higher ($4.54 ½), Sept 2 cents higher ($4.61 ¾) & Dec 2 ¼ cents higher ($4.73 ¾)

July Mpls Wheat closed 2 ½ cents lower ($5.18), Sept 3 cents lower ($5.28 ¾) & Dec 2 cents lower ($5.42 ¼)

Weekly Wheat Export Sales – 175.9 K T. old crop vs. 100-250 K T. expected – 252.4 K T. new crop vs. 100-400 K T. expected

Weekly wheat export sales continue to be in the range of paltry. Then again the recent rally has not been about export but rather how the winter crop will finish not only in this country but also with our competitors. Russia did detail a reduction in their upcoming wheat crop – 76.2 M T. vs. previous estimate of 77.2 M T. This compares to the current USDA estimate of 77.0 M T. The USDA 2019 Russian wheat crop estimate is 73.61 M T. and the 2018 estimate was 71.69 M T. In the day’s early going Chgo futures were able to extend Wednesday’s rally up to the $5.24 level before profit taking set in. the KC’s early rally was not quite as stout but it too saw a wave of profit taking as did the Mpls market. Mpls finishes lower on the day from the idea the US spring crop in N. Dakota will eventually get planted. Chgo and KC were able to find support on the break after trading briefly lower on the day. Forecasts for the harvest ready areas of Texas and the soon to be ready areas of Oklahoma are calling for excessive rainfall over the next number of days.

Interior advertised basis for standard protein wheat run unchanged on the day. The gulf for HRW improves by 4 cents while no changes are being reported for SRW export. Gulf strength for HRW may be in anticipation of the excessive rain forecasts for the harvest ready areas of Texas. Despite the flat price finishing minorly higher bear spreads were working in both KC and Chgo.

Chgo July wheat rallies into levels it broke down from earlier this month and the price retreats. The July KC doesn’t really challenge any noticeable chart resistance but it too retreats from the day’s early highs. Short term overbought can be the excuse. We have a three day weekend coming at us and there is some weather concerns for the both the US and our overseas competition. With that said I would be surprised if prices sustained much of sell-off. The other side of that coin is that Monday night could be a biggie in either direction. That’s just the way weather markets work going into and after three day weekends.

Daily Support & Resistance – 5/22

July Chgo Wheat – $5.07 – $5.25

July KC Wheat – $4.48 – $4.64

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.