Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 6 ¾ cents higher ($5.34 ½), Dec 6 cents higher ($5.39 ¾) & March 5 ½ cents higher ($5.45 ½)

Sept KC Wheat closed 6 cents higher ($4.48 ½), Dec 5 ¾ cents higher ($4.59 ½) & March 5 ½ cents higher ($4.70 ¾)

Sept Mpls Wheat closed 4 ¼ cents higher ($5.14 ¾), Dec 3 ¼ cents higher ($5.28 ¼) & March 2 ¾ cents higher ($5.41 ¾)

Weekly Wheat Export Sales – old crop vs. 300-600 K T. expected – new crop vs. none expected

As far as I’m concerned today’s wheat trade was all about the continued weakness in the US Dollar which turn makes US exports a bit more attractive. I’m told that as Russia moves through harvest yields are starting to show some improvement. The EU harvest continues to show disappointing yields which should not be viewed as a surprise. World wheat prices continue to show a relatively strong tone. Egypt’s purchases yesterday only totaled 114 K T. It appears they only jumped on the lowball offers. The lowest FOB offer was $208.98 and then jumped to $214.00. The two loads they bought was only $1.00 less vs. the previous week’s purchase for a similar amount.

Advertised cash wheat basis doesn’t do a whole lot. The tone of the interior SRW basis is steady with a firm bias while the interior HRW basis is steady with a soft bias. The Gulf runs unchanged for both varieties as the HRW basis has been flat for some time while the SRW basis shows a firm undertone. Chgo spreads continue to run with the flat price so today’s spreads showed some tightening. KC spreads ran fractionally better.

Lots of volatility in the Chgo wheat market as evidenced how the day’s high was made. Shortly before 1:00 PM today Sept Chgo wheat spiked nearly 7 cents to make the days high and almost as quickly it was 6 cents off of that high (many wonder if it was a fat finger). Coming into today I had $5.40 as resistance for the Sept contract. In the manner it was tested today I will still view as short term resistance. I believe the daily trade wants to be long wheat so sharp breaks will be well received until proven wrong especially in the Chgo market. The KC market is much more stable as it reflects what appears to be a more than ample US supply as well as an ample global supply. Weekly export sales and the value of the US dollar should dictate tomorrow’s trade.

Daily Support & Resistance – 7/23

Sept Chgo Wheat: $5.25 – $5.40

Sept KC Wheat: $4.40 – $4.55

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.