Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 24 cents higher ($5.50 ¾), Dec 21 cents higher ($5.53 ¾) & March 19 cents higher ($5.58)

Sept KC Wheat closed 17 ¼ cents higher ($4.59 ½), Dec 16 ½ cents higher ($4.70 ¾) & March 16 cents higher ($4.82)

Sept Mpls Wheat closed 9 cents higher ($5.27 ¾), Dec 9 cents higher ($5.40 ½) & March 9 cents higher ($5.53)

Weekly Wheat Export Sales – old crop vs. 250-650 K T. expected – new crop vs. none expected

The explosion in wheat prices today can be attribute to any of the following – higher global prices, an EU and Black Sea crop that still appears to be shrinking in size, the Black Sea apparently washing out previously sold feed wheat contracts, a lack of freight availability in the Black Sea area and last but not least rumored Chinese buying. In the past I’ve been a bit hesitant to go along with the Chinese buying rumors but given the buying spree they been on why not.

Advertised interior basis levels for either SRW or HRW are not showing any changes. This holds true for the Gulf basis levels as well. Today’s outright flat price buying tightened the spreads in both the Chgo and KC markets with Chgo showing the greatest gains.

Trendline resistance has fallen by the wayside in Chgo. Long term moving averages have fallen by the wayside in Chgo. Given what appears to be emotional buying a run to the $5.70 level is not out of the cards for the Sept Chgo contract. The higher these markets go the greater the spec involvement will become. Nothing in the price action suggests the rally is overdone when looking at daily technical indicators. The shorter term inter-day charts suggest a bit of overbought but that can be easily undone with some overnight backing and filling.

Daily Support & Resistance – 7/16

Sept Chgo Wheat: $5.42 – $5.60 ($5.70)

Sept KC Wheat: $4.54 – $4.66 ($4.72)

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.