Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 25 ¼ higher ($5.17 ½), Sept 21 ¼  cents higher ($5.16 ½) & Dec 19 ¾ cents higher ($5.21 ¾)

July KC Wheat closed 16 cents higher (4.52), Sept 16 cents higher ($4.56 ¾) & Dec 14 ¾ cents higher ($4.67 ½)

July Mpls Wheat closed 10 ¾ ($5.23 ¼) & Dec 10 ¼ cents higher ($5.37)

Weekly Wheat Export Sales – Old crop vs. 200-500 K T. expected – new crop vs. none expected

The idea of lower wheat crops overseas pushed the Chgo market into technical buying when prices rallied through the $5.00 level (Sept). The recent consolidating price action followed by today’s price action now has many thinking we have established seasonal lows. On Friday the USDA may give us a lower US production figure but with a higher projected carryout due to a higher than expected quarterly stocks figure that set last year’s carryout, this year’s carryin. The wild card will be what the USDA does with the global data as its those overseas wheat markets that set the tone for the global pricing.

I’m not seeing any changes with the interior advertised wheat basis quotes. The cash SRW market appears to have firm tone while the interior HRW market has a soft tone. The gulf basis HRW is firm while the Gulf basis for SRW runs unchanged. The flat price buying we saw in both markets bulled their respective spreads.

The flat price wheat charts sure look like we’ve some seasonal lows. Unfortunately that doesn’t mean we jump right in and buy the rally. Historically US wheat futures, especially Chgo, are known for their flaky volatility. After today’s price action the short term intra-day and inter-day technical data reads a bit overbought.

I’d like to see some backing and filling before jumping in form the long side. Another 10 cents higher without a correction will catch me being a hero and fading the rally.

Daily Support & Resistance – 7/09

Sept Chgo Wheat: $5.10 – $5.27

Sept KC Wheat: $4.50 – $4.67

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.