Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 8 ¾ higher ($5.26 ¼), Sept 8 ½ cents higher ($5.25) & Dec 8 ¼ cents higher ($5.30)

July KC Wheat closed unchanged (4.52), Sept unchanged ($4.56 ¾) & Dec ½ cent higher ($4.68)

July Mpls Wheat closed 2 ¾ cents higher ($5.14 ¾), Sept 2 ¾ cents higher ($5.26 ¾) & Dec 2 cents higher ($5.39)

Weekly Wheat Export Sales – 326.2 K T. old crop vs. 200-500 K T. expected – -75.0 K T. new crop vs. none expected

Chgo wheat trades with the Paris wheat market as they are both soft wheat contracts. As the EU moves into harvest fears are that further crop losses will be uncovered. The idea here is whatever exports France may lose due to its short crop the US may gain. The KC market is left in the dust as it is more reflective of the lackluster weekly export sales. The Mpls market is reflecting the beneficial weather that has been moving through the Northern Plains. As of this writing these inter-market spreads appear to be a bit out of whack.

Chart Talk – Chgo charts are a bit over done on the top side according to inter-day charts. I would expect to see some backing and filling to get the inter-market spreads back in line. Sept Chgo should experience some decent resistance from the mid-$5.30’s up to the mid-low $5.40’s. The Sept KC chart appears to be honoring the resistance in the mid-$4.60’s. Both of these markets show a fair amount of room to do some backing and filling of their recent rally. Going forward we’ll see what the USDA has to say about the US crop on tomorrow’s production report as well as what the World looks like. Trade guesstimates for tomorrow’s report call for a slightly lower US crop size but with a slightly higher carryout. The old crop carryout came in much higher on the recent stocks report and that works to offset the lower production number. We’ll know more tomorrow if the trade guesstimaters know what they’re talking about.

Daily Support & Resistance – 7/10

Sept Chgo Wheat: $5.13 – $5.35 ($5.42)

Sept KC Wheat: $4.47 – $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.