Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 3 ¼ cents lower ($5.29 ½), Dec 2 ½ cents lower ($5.36) & March 1 ¾ cents lower ($5.42 ½)

Sept KC Wheat closed 5 ¾ cents lower (4.40), Dec 5 ½ cents lower ($4.50 ½) & March 5 ¾ cents lower ($4.60 ¾)

Sept Mpls Wheat closed 2 cents higher ($5.13), Dec 1 ½ cents higher ($5.26 ¼) & March 1 cent higher ($5.39 ¾)

Weekly Wheat Export Sales – 676.6 K T. old crop vs. 250-650 K T. expected – no new crop vs. none expected

Weekly wheat export sales were deemed solid based on expectations. Despite these sales flat price wheat continues to spin its wheels as it seems the market is trading range bound for the time being. I think the trade deep down wants to be friendly longer term but we just don’t know enough about the competitions’ supply. The Russian crop appears to be more than ample while the EU crop could be one of their lowest in years. Bringing up the rear is Australia – the tout there is a sharply rebounding crop size vs. the previous few years.

The interior cash wheat remains quiet according to advertised basis levels for both SRW and HRW. I’m told the HRW rail basis to the Gulf gets a 5 cent bump higher while the SRW basis at the Gulf runs unchanged (its been that way since mid-June). Once again Chgo spreads went the route of the flat price (a slight widening bias). KC spreads ran steady to fractionally mixed.

It’s probably time to start paying attention to the Mpls market. The only reason I say this is that it has been toying with contract lows for the past 1 ½ weeks and today it was the only US futures contract that finished higher on the day.

The other day I outlined Sept Chgo wheat as a trading range affair between $5.17 and $5.40. Daily momentum indicators still suggest a lower bias. Sept KC has a bit wider trading range – $4.30 to $4.60. This market too has a lower bias.

Daily Support & Resistance – 7/31

Sept Chgo Wheat: $5.20 – $5.36

Sept KC Wheat: $4.32 – $4.46

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.