Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 1 ¾ cents higher ($5.06 ¼), Sept ¾ cent higher ($5.11 ½) & Dec ½ cent lower ($5.20 ¾)

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

July Mpls Wheat closed 4 ¾ cents lower ($5.19 ½), Sept 4 ¾ cents lower ($5.31 ¾) & Dec 5 ¼ cents lower ($5.45 ¾)

Overnight Egypt buys 120 K T. Russian wheat – average price paid $227.25 (C&F) vs. $220.65 (C&F) Ukraine on June 2nd

Weekly Wheat Export Sales – old crop vs. 0-300 K T. expected – new crop vs. 200-500 K T. expected

Chgo and KC wheat prices go into a consolidation mode following recent attempts to sell it off. We saw a fair amount of push-pull on the day. Egypt pays $7.00 per T. more from Russia vs. what they paid Ukraine last week. SovEcon, a Russian Ag consultancy, raises their potential wheat crop to 82.7 M T. Last month the USDA pegged the Russian wheat crop at 77.0 M T. the continued decline in the US Dollar is viewed as supportive. Harvest should be moving along without interruption in the US Southern Plains. Tomorrow’s USDA Production/Supply-Demand update should feature a slightly lower US crop while world production ideas are now mixed given the SovEcon hike in Russian production.

Interior SRW basis is steady with a slightly easier bias. The interior HRW basis is definitely easier given recent declines in Oklahoma. The gulf is steady for both varieties. Chgo spreads showed a definite bullish bias following recent declines to 2-3 month lows. KC spreads ran unchanged on the day.

Today’s inside day of yesterday does not negate the suggested sell signal from yesterday for Chgo wheat futures. The KC market has yet to register a sell signal similar to Chgo’s but it appears it would not take much for that to happen. I have to think tomorrow’s World data will carry far more weight/direction to the market vs. whatever the domestic data shows. Time will tell as it always does.

Daily Support & Resistance – 6/11

July Chgo Wheat: $4.96 – $5.18  

July KC Wheat: $4.50 (?) – $4.70

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.