Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 4 ½ cents higher ($4.90), Sept 5 ¼ cents higher ($4.91 ¾) & Dec 5 ½ cents higher ($4.99)

July KC Wheat closed 6 ¾ cents higher (4.35 ½), Sept 3 ¼ cents higher ($4.39 ¾) & Dec 2 ¾ cents higher ($4.52)

July Mpls Wheat closed 12 ¼ cents higher ($5.09 ¼), Sept 10 ½ cents higher ($5.20 ¼) & Dec 9 ¼ cents higher ($5.33 ½)

Not to be outdone by the surprises in corn and soybeans the wheat market had its own surprises. All wheat acres come in 468 K less that expected and 405 K less vs. the March figure. Trader expectations had winter wheat acres increasing by about 75 K – they declined by 225 K. Spring wheat acres were expected to decline by 39 K acres – they declined 390 K. Some of the acreage declines were offset by the higher than expected Quarterly Stocks figure – 1.043 billion bu. vs. 984 million expected. Granted the Chgo and KC markets finished higher but they were left in the dust by the sharp rallies seen in both corn and soybeans. Call it inter-market spreading as well as the global competition just getting under way with their respective winter harvests.

The other day my thought was the US wheat futures have gone low enough for now. Going forward wheat may be the weak sister of the Ag complex but I believe it will indeed move higher. Close scrutiny will be given to the developing spring crop as well as harvest results from our global competitors. $5.10 or so can be an initial target for Sept Chgo and something closer to $4.60 for Sept KC.

Daily Support & Resistance – 7/01

Sept Chgo Wheat: $4.86 – $5.04

Sept KC Wheat: $4.34 – $4.52

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.