Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 7 ¼ cents lower ($4.88 ¾), Sept 7 ¼ cents lower ($4.94) & Dec 6 ½ cents lower ($5.03)

July KC Wheat closed 5 ¾ cents lower ($4.32 ½), Sept 6 cents lower ($4.41) & Dec 6 ½ cents lower ($4.54 ¼)

July Mpls Wheat closed 5 ¼ cents higher ($5.20 ¼), Sept 4 ½ cents higher ($5.30 ¾) & Dec 3 cents higher ($5.41 ¾)

Weekly Wheat Export Sales – old crop vs. 250-500 K T. expected – new crop vs. none expected

Egypt announces an overnight tender for optional origin wheat

It seems like the entire Northern Hemisphere has winter wheat for sale and offers (from what I’m told) are fairly aggressive. Given the recent price break around the world I figures it was just a question of time before we saw Egypt again. This tender they have announced appears to invite offers from all over the world for all types of milling quality. In the past there have been a few times where the US has been in the ballpark with their FOB offers but the high cost of freight out of the US has kept them from being competitive. Will this time be different?

Advertised basis levels for SRW don’t do much nor does the Gulf. Interior HRW basis levels run unchanged but with a defensive look. New sales are slow because of the poor looking prices. Spreads in Chgo remain soft looking while KC spreads are trying to poke their noses up.

I wish I could say after the recent price break US wheat futures are oversold on a daily basis but they are not. The shorter term inter-day price charts read relatively low but so far they haven’t given us much of long side day trading opportunity. With the Egyptian tender tonight I would expect to see to see an attempt at firming. Upside potential will depend on what kind of offering prices we see from the different participants. I can’t sell current levels but the price action sure leaves a lot to be desired for those that think the price has gone low enough.

Daily Support & Resistance – 6/18

July Chgo Wheat: ??? – $4.96

July KC Wheat: ??? – $4.41

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.