Wheat Commentary

storck

Wheat – Just My Opinion

Sept Chgo Wheat closed 16 ½ cents higher ($5.16 ½), Dec 16 ¾ cents higher ($5.26 ¼) & March 16 ¼ cents higher ($5.32 ½)

Sept KC Wheat closed 12 cents higher ($4.37 ¼), Dec 12 ¾ cents higher ($4.48 ½) & March 13 cents higher ($4.58)

Sept Mpls Wheat closed 7 ½ cents higher ($5.05), Dec 7 ¾ cents higher ($5.20) & March 7 ¼ cents higher ($5.32 ¼)

USDA announces 130 K T. HRW sold to unknown

Weekly Wheat Export Inspections – 461.7 K T. vs. 400-600 K T. expected

US Winter Wheat Ratings – Harvested – 93% vs. 95% expected vs. 96% 5-year average

US Spring Wheat Ratings – 70% GE (+1%) vs. 68% expected vs. 70% year ago – Harvested – 30% vs. 30% expected vs. 43% 5-year average

A weaker US Dollar, a USDA announced export sale, and strength elsewhere in the Ag sector all worked together to prompt additional technical buying in US wheat futures. The IKAR announcement, a Russian Ag consultancy, suggesting another increase in the size of the Russian wheat crop (82.0 M T.) was pretty much ignored. The Ukraine wheat harvest is pretty much done and crop size is close to may be a shade lower vs. previous estimates. The UK wheat crop is thought to be the worst dating back to the 1980”s. So here we have areas with a great crop, an expected crop, and also poor crops. It looks like to me we will have more than ample global wheat supplies after all is said and done.

Advertised interior basis levels for SRW read steady to better while the Gulf basis reads a bit easier. Sept through March spreads read fractionally mixed and then tightening takes over as goes forward. The interior basis for HRW appears to be fully steady while the gulf basis reads a shade easier. KC spreads showed a widening bias out to next year’s new crop.

Dec Chgo wheat has now rallied back to the level it broke down from on August 1st, a 30 cent break followed by a 30 cent rally in just two weeks’ time. Since it remains my opinion this market is a crowd follower the action in the corn and soy markets will dictate direction as will direction in the overseas wheat markets. My bias is to sell Dec Chgo wheat at $5.30 on up. I saw no reason for Chgo to gain on KC today other than speculative fervor. Dec KC is in resistance as we speak.

Daily Support & Resistance – 8/18

Dec Chgo Wheat: $5.15 – $5.31 

Dec KC Wheat: $4.40 – $4.52

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.