Wheat Commentary

storck

Wheat – Just My Opinion

Sept Chgo Wheat closed 3 ¾ cents lower ($4.91 ¼), Dec 3 ¾ cents lower ($5.00) & March 3 ½ cents lower ($5.07 ¼)

Sept KC Wheat closed 1 cent higher ($4.17 ¾), Dec ¾ cent higher ($4.29) & March ¼ cent higher ($4.38 ¾)

Sept Mpls Wheat closed ½ cent lower ($4.92 ¼), Dec 1 ¾ cents lower ($5.07) & March 2 ¼ cents lower ($5.20 ¾)

Weekly Wheat Export Sales – old crop vs. 250-800 K T. expected – new crop vs. none expected

Egypt announces another overnight tender for optional origin wheat.

USDA All Wheat production – 1.838 billion bu. vs.1.832 expected vs. 1.824 last month

USDA Winter Wheat production – 1.198 billion bu. vs. 1.216 expected vs. 1.218 last month

USDA Spring Wheat production – 577 million bu. vs. 560 expected vs. 550 last month

USDA Wheat carryout – 925 million bu. vs. 946 expected vs. 942 last month

USDA World new crop wheat carryout – 316.79 M T. vs. 313.84 expected vs. 314.84 last month

USDA World old crop wheat carryout – 300.91 M T. vs. 296.55 expected vs. 297.12 last month.

US wheat production comes in a bit higher than expected yet the projected carryout comes down. Better exports and lower imports were responsible. The HRW carryout comes down 33 million bu. while the HRS carryout increases by 23 million bu. and the SRW carryout stays unchanged. Let’s move on to the bigger picture, the World data. EU wheat production is cut by 4.0 M T. while Russia and Ukraine production are increased by 2.0 M T. (+1.5 and +0.5). This leads to global production coming down by 3.3 M T. yet the projected carryout increases by almost 2.0 M T. The carryin was the cause as it increased by 3.7 M T. Long story short – the global wheat situation will continue to dominate the US market.

Sept Chgo wheat continues to probe the technical support that was established in late June, early July. I’m not wild about selling into this support despite the lackluster price performance. Sept KC wheat is trying to honor the support at $4.10 (contract lows) that was set late last week, early this week. I’m not a fan of selling into these contract lows. For what it is worth I still continue to have a bias to be long KC vs. short Chgo. Some of my rationale for this is that the projected carryout for HRW is 120 million bu. less vs. last year while the SRW carryout is only 2 million bu. less vs. last year.

Daily Support & Resistance – 8/13

Sept Chgo Wheat: $4.85 – $5.02 

Sept KC Wheat: $4.12 – $4.25

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.