Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 5 ½ cents higher ($4.86 ¾), Sept 2 ½ cents higher ($4.88 ¼) & Dec 1 ¼ cents higher ($4.95 ¼)

July KC Wheat closed 1 ½ cents lower ($4.29 ¾), Sept 2 cents lower ($4.37 ¾) & Dec 2 ¼ cents lower ($4.50 ½)

July Mpls Wheat closed 5 ¼ cents lower ($5.11), Sept 5 ¼ cents lower ($5.19) & Dec 4 ½ cents lower ($5.31 ½)

Weekly Wheat Export Sales – 518.7 K T. old crop vs. 250-650 K T. expected – no new crop vs. none expected

Chgo wheat tries to go it alone on Thursday with its higher prices. Weekly export sales were alright based on expectations. The trade tried to get excited as the “exports” part of the sales report featured wheat going to China. Also giving the Chgo market a boost was the EU once again downsizing is soft wheat crop. I believe we also saw some 1st Notice Day jockeying around. For the past number of months we have not seen any SRW delivered in Chgo as what deliveries we did see were always some “hard” variety. Trader estimates for the upcoming Acreage report suggest “All Wheat” could increase by 63 K vs. the March estimate but down 440 K from one year ago. “Winter Wheat” acres are expected to increase 74 K acres from the March figure but down 903 K from one year ago. “Spring Wheat” acres are expected to decline by 39 K acres from the March figure and decline by 109 K from one year ago. The Quarterly Stocks estimate is to see 984 million bu. vs. the 1.080 billion bu. we saw one year ago.

The interior SRW cash basis is showing signs of some minor improvement while the Gulf market remains nothing special. Chgo spreads showed a definite bullish bias but most of that was in the July contract (1st Notice Day implications?). The interior HRW basis continues to show a defensive posture while the Gulf market is steady with a minor firm undertone. KC spreads showed a fractional bullish bias.

I’m still calling the wheat charts in a consolidation mode just above recent lows. From a technical standpoint I believe we can still see some technical upside retracement of the June break. What prompts the catalyst for this remains to be seen.

Daily Support & Resistance – 6/26

July Chgo Wheat: $4.80 – $4.93

July KC Wheat: $4.25 – $4.37

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.