Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 5 cents higher ($5.44 ¼), Dec 3 ½ cents higher ($5.52 ¼) & March 4 cents higher ($5.60 ½)

Sept KC Wheat closed 8 ¾ cents higher ($4.70 ½), Dec 3 cents higher ($4.75 ¼) & March 3 ½ cents higher ($4.86 ¼)

Sept Mpls Wheat closed unchanged ($5.18 ½), Dec ¼ cent higher ($5.39 ½) & March ½ cent higher ($5.51 ½)

Weekly Wheat Export Inspections – 516.1 K T. vs. 400-700 K T. expected

Weekly Spring Wheat Ratings – Harvested – % vs. 64% expected vs. % 5-year average

What’s bullish – higher world values, a lower EU crop size, no deliveries against the Sept Chgo contract and the continued decline in the value of the US Dollar. What’s bearish – higher Russian crop size, higher Canadian crop size, big Mpls deliveries and a short term technical overbought.

Wheat prices ran higher along with the rest of the Ag crowd in the early going before it too had its own round of profit taking. At one point Dec Chgo was 11 ½ cents higher before selling off to unchanged. The KC market saw similar price action while the Mpls market was nowhere near as strong and struggled to finish fractionally higher on the day.

Advertised basis levels for standard protein wheat run unchanged. I’m told higher proteins are seeing better basis levels. Gulf values (basis) don’t appear to do much. Chgo spreads, Dec forward, run mixed as Dec loses to March while March gains going forward. KC saw similar spread action.

The Dec wheat charts, both Chgo and KC still show a firm bias despite today’s minor profit taking run. For some reason I cannot explain, just a gut feeling, I don’t trust the rally. The northern hemisphere harvest is wrapping up and its an okay harvest when all countries are combined. The strong Russian crop almost offsets the poor EU crop. In the southern hemisphere the Argentine crop is off to a rough start while the Australian crop is off to a good start; once again almost offsetting issues. Despite not trusting current levels the best MO for trading continues to be fading short term inter-day extremes similar to what we saw earlier today.

Daily Support & Resistance – 9/01

Dec Chgo Wheat: $5.41 – $5.59 

Dec KC Wheat: $4.65 – $4.83

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.