Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 8 cents lower ($5.47 ¾), Dec 5 ¾ cents lower ($5.58 ¼) & March 5 cents lower ($5.66 ¾)

Sept KC Wheat closed 6 ¾ cents lower ($4.76 ¾), Dec 6 ¼ cents lower ($4.79 ¼) & March 5 ¾ cents lower ($4.90 ¼)

Sept Mpls Wheat closed unchanged ($5.25 ¼), Dec 1 ¼ cents higher ($5.47 ½) & March 1 ¾ cents higher ($5.60)

Weekly Wheat Export Sales – old crop vs. 350-600 K T. expected – new crop vs. none expected

Egypt announces an overnight tender for optional origin wheat

The chatter behind Tuesday’s rally was Chinese interest. Since none of this has been confirmed follow through today was lacking. It should be pointed out that the Gulf for HRW did firm by 5 cents. My opinion for yesterday’s rally was new fund money coming in since it was the first day of a new month. What so far is a minor rebound in the US dollar did weigh on prices. After the close Egypt announced an optional origin tender. It seems like that after every noticeable down day during this 70 cent rally here comes Egypt. What do they know that I don’t? Granted the EU doesn’t have the wheat to be an aggressive seller/exporter after their poor season Russian can more than accommodate.

Interior basis levels for HRW and SRW don’t appear to be doing much. As I mentioned earlier the gulf market for HRW is 5 cents better today. I’m not seeing any changes in the SRW export market. Both Chgo and KC had a bearish bias with their respective intra-market spreads. Chgo has yet to see any deliveries against its September contract but after today’s spread action we may see some.

Rallies in wheat futures (Chgo) are famous for 70-80 cents rallies. Currently we are at 71 cents. With that said I can’t imagine chasing this rally. The price action does not suggest the rally is over but it doesn’t look like there is that much time left to it.

Daily Support & Resistance – 9/03

Dec Chgo Wheat: $5.50 – $5.70 

Dec KC Wheat: $4.72 – $4.91

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