Wheat Commentary

storck

Wheat – Just My Opinion

July Chgo Wheat closed 4 cents higher ($5.12)), Sept 3 ½ cents higher ($5.15 ¾) & Dec 3 cents higher ($5.26)

July KC Wheat closed 7 cents higher ($4.57 ¾), Sept 6 ¾ cents higher ($4.64 ¾) & Dec 6 ½ cents higher ($4.77)

July Mpls Wheat closed 3 ¾ cents higher ($5.20 ¼), Sept 3 ¾ cents higher ($5.31 ¼) & Dec 3 ½ cents higher ($5.44 ¼)

Weekly Export Sales – old crop vs. 50-250 K T. expected – new crop vs. 100-600 K T. expected

A continued weakening US dollar coupled with a technical short term oversold scenario allowed wheat futures to bounce on Wednesday. The oncoming US harvest kept today’s bounce within yesterday’s daily range. Overseas weather has been beneficial for the Black Sea area and rain is in the forecasts for some of the dry areas of Western Europe. Trade ideas remain mixed as to whether or not the recent price activity is a pause before going lower or are we in the process of creating a bottom. We may be faced with this consolidating type trade until the USDA gives us a clearer picture on Thursday, June 11th, when they update both US and World Supply-Demand.

Not much happens with the interior SRW basis while the HRW interior basis is mixed. Kansas is backing off on its basis while Oklahoma is increasing its basis. The gulf basis for HRW is fully steady while the Gulf basis for SRW is weakening. Spreads showed a bullish bias in both markets.

For the time being July Chgo wheat appears stuck in a trading range between the mid-$4.90’s and the mid-high $5.20’s. It’s a similar scenario for the July KC as it trades between the high $4.30’s and the mid-low $4.70’s. AS I mentioned earlier we may be stuck in these ranges until we hear for the USDA next week on the 11th. Between now and then the best approach for trading is to fade short term extremes as they near the outlined ranges.

Daily Support & Resistance – 6/04

July Chgo Wheat: $5.05 – $5.20  

July KC Wheat: $4.50 – $4.69

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.