Wheat Commentary

storck

Wheat – Just My Opinion

July Chgo Wheat closed 7 cents lower ($5.04 ½), Sept 6 ½ cents lower ($5.10 ¾) & Dec 6 ¼ cents lower ($5.21 ¼)

July KC Wheat closed 2 ¾ cents lower ($4.57 ¾), Sept 2 ¼ cents lower ($4.66 ¼) & Dec 2 ¼ cents lower ($4.78 ½)

July Mpls Wheat closed 5 ½ cents higher ($5.24 ¼), Sept 5 ¾ cents higher ($5.36 ½) & Dec 5 ½ cents higher ($5.50 ¾)

Egypt announces an overnight tender for optional origin wheat.

Technical selling beats on the July Chgo contract when it went below the $5.05 level. Losses in KC were nowhere as severe while Mpls finished steady on the day. Decent crop conditions and lower prices overseas set the initial negative tone for the day. I don’t see any slowdowns to the HRW harvest in the Oklahoma and Texas areas. I can’t imagine Kansas harvest being too far behind. The continued decline in the US Dollar offered no help at all.

In recent days interior wheat basis levels were showing a steady to firm tone. That was not the case today as the Ohio River reported an easing basis as did Oklahoma. Enid, OK reported a 20 cent drop in its basis. HRW at the Gulf is showing some easing while the SRW at the Gulf is fully steady. The nearby Chgo spread has dropped to a level (-6 ¾) not seen since mid-March. KC spreads eased fractionally but is pretty much the same story as Chgo – ugly spreads reflecting harvest and just so-so business.

The July Chgo wheat chart is on the verge of becoming unglued. The only redeeming technical factor is that the inter-day charts are showing a fair degree of oversold so we probably don’t have to sell into today’s break. For the time being the July KC market is in much better shape (not as weak looking) as it challenged the trend line of its upflagging effort and so far it is holding. Take out the $4.50 level and this market will look as ugly as Chgo.

Daily Support & Resistance – 6/10

July Chgo Wheat: $4.98 – $5.10  

July KC Wheat: $4.52 – $4.65

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.