Wheat Commentary


Wheat – Just My Opinion

Dec Chgo Wheat closed 2 cents lower ($6.06), March ½ cent lower ($6.09 ½), & July 1 ¾ cents higher ($6.03 ¾)

Dec KC Wheat closed 2 ¾ cents higher ($5.59 ¾), March 3 ¾ cents higher ($5.66) & July 3 ½ cents higher ($5.75)

Dec Mpls Wheat closed 4 ¾ cents higher ($5.57), March 5 ¾ cents higher ($5.71) & July 4 ½ cents higher ($5.83 ¼)

Weekly Wheat Export Sales – old crop vs. 200-700 K T. expected – new crop vs. none expected

Egypt announces an overnight tender for optional origin wheat.

It was a mixed choppy type trade with the “hard” varieties showing advances (led by Mpls) while Chgo was on the short end of the inter-market spread trade. Australia is fearful that China will add their wheat to the current slate of tariffs. I think that’s why Mpls was your leader. If China does indeed invoke tariffs on Australian wheat China’s interest in the US HRS could improve. We still have major concerns over the conditions of the US HRW wheat. I’m not seeing any beneficial moisture in the forecasts. Since Egypt has announced an overnight tender for optional origin wheat it will be interesting to see if any US wheat gets offered considering the recent rout in the US Dollar.

The interior cash wheat markets (basis) continue to be quiet. The export basis for HRW has shown some recent easing while the SRW export basis stands tall. Nearby spreads in all three varieties showed a bearish bias. It makes me think trader focus has moved to the spring months further suggesting the concerns around the condition of the winter wheat.

The Dec Chgo price action suggests consolidation just below what I believe to be a top; $6.15 to $6.20. The Dec KC chart is stronger looking but still honoring suspected resistance; $5.60 to $5.65. It remains my idea that US wheat futures have limited upside potential from current levels as long as demand for US wheat remains fair at best.

Daily Support & Resistance – 11/05

Dec Chgo Wheat: $5.98 – $6.15

Dec KC Wheat: $5.50 – $5.65

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.