Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 11 ½ cents higher ($4.85 ½), Sept 10 ¾ cents higher ($4.86 ½) & Dec 9 ½ cents higher ($4.93 ½)

July KC Wheat closed 7 ½ cents higher ($4.28 ¾), Sept 8 ¾ cents higher ($4.36 ½) & Dec 8 ¼ cents higher ($4.49 ¼)

July Mpls Wheat closed 1 ½ cents lower ($4.97), Sept 1 cent higher ($5.09 ¾) & Dec ¾ cent higher ($5.24 ¼)

Weekly Wheat Export Inspections – 515.3 K T. vs. 450-650 K T. expected

The USDA is rating the US winter wheat crop at 52% GE (unch) vs. 52% expected vs. 63% year ago – Harvested – 41% vs. 44% expected vs. 41% 5-year average

The USDA is rating the US spring wheat crop at 69% GE (-6%) vs. 75% expected vs. 75% year ago – Headed – 36% vs. 45% 5-year average

As far as I could tell today’s rally in the Chgo and KC wheat markets was all about Friday’s break into new low ground being overdone. Basically today’s rally reversed that break. The news of the day suggested harvesting is just about to get underway in the EU and the Black Sea areas. There appears to be a fair amount of interest in the global export markets. That should not be surprising given the idea that a decent winter wheat harvest should offer one decent bung opportunities. Wheat futures will be looking at the same considerations tomorrow as the other grain markets – month end, quarter end, 1st Notice Day, Quarterly stocks (984 million bu. expected) and Acreage (All wheat expected at 44.718 million acres).

Advertised interior cash wheat prices run mixed depending upon the variety. Whichever the variety not much is getting sold. The SRW basis mostly steady but with a slightly firm undertone. The Gulf basis for SRW is quiet. Bull spreads were working in Chgo driven the flat price short covering and the unknown around 1sr Notice Day deliveries. The HRW basis clearly shows a weak undertone despite the lack of farmer sales. The export basis for HRW remains quiet yet steady. The nearby July/Sept spread suggests the possibility of deliveries while Sept forward spreads had a bullish bias.

Today’s reversal of Friday’s plunge is trying to suggest US wheat futures (Chgo & KC) may have gone low enough for the time being. Hopefully what the USDA has to say tomorrow will shed some clarity on this idea.

Daily Support & Resistance – 6/30

Sept Chgo Wheat: $4.75 – $4.98

Sept KC Wheat: $4.25 – $4.48

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.