Wheat Commentary

storck

Wheat – Just My Opinion

Dec Chgo Wheat closed 3 ¼ cents higher ($6.09 ¼), March 4 cents higher ($6.13 ½), & July 3 ¼ cents higher ($6.07)

Dec KC Wheat closed 3 ¼ cents higher ($5.63), March 3 ½ cents higher ($5.69 ½) & July 3 3 ¾ cents higher ($5.78 ¾)

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 – 597.1 K T. old crop vs. 200-700 K T. expected – no new crop vs. none expected

Not to be left out of the early exuberance wheat markets joined in the party as they too spiked higher in the early going. At one point both Chgo and KC were as much as 20 cents higher. Unfortunately for the bulge buyers it did not last. Some of the rationale for the early strength was the noticeably lower US Dollar, decent weekly export sales, condition concerns for US winter wheat (Russian also) and both Egypt and Saudi Arabia tendering for wheat. The rally didn’t last too long. Easing accelerated when it became known Egypt paid $3.00 less per T. vs. what they paid on the 23rd. This fact alone did not justify the 20 cent higher US futures. Not much change is expected on Tuesday’s supply-demand update. Trader surveys suggest the US wheat carryout could decline by a mere 2 million bu. to 881 million and World carryout declining by 1.67 M T. to 319.78 M T.

The interior cash wheat basis doesn’t change; steady as she goes. The same holds true for export values as well. Dec/March Chgo was a bit easier while March forward ran steady to slightly tighter vs. its deferred. KC spreads saw little change on the day.

The retreat from the early highs further suggests the US wheat market has no where near the dynamics that corn and soybeans are enjoying. I’ll grant you the daily highs went higher than I thought but the close only charts suggest the recent established resistance is holding. The bar charts (high, low, close) in KC are showing double tops. The Chgo bar charts show congestive type resistance being tested while closes were disappointing. Going forward it looks like US wheat futures will continue to be on the short end of the inter-market spreads vs. long corn and soybeans.

Daily Support & Resistance – 11/06

Dec Chgo Wheat: $6.00 – $6.18

Dec KC Wheat: $5.55 – $5.70

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.