Wheat Commentary


Wheat – Just My Opinion

Dec Chgo Wheat closed 11 cents higher ($6.08 ½), March 10 ¾ cents higher ($6.16 ¼), & July 10 ¾ cents higher ($6.13 ¾)

Dec KC Wheat closed 9 cents higher ($5.61 ½), March 9 ¼ cents higher ($5.69 ½) & July 9 ¼ cents higher ($5.79 ¼)

Dec Mpls Wheat closed 6 ¾ cents higher ($5.61 ½), March 7 ¾ cents higher ($5.77 ¼) & July 8 ½ cents higher ($5.90 ¾)

USDA US Supply-DemandDomestic Usage – 1.127 billion bu. vs. 1.121 – Exports – 975 million bu. vs. 975 – US Carryout – 877 million bu. vs. 883 – S-T-U – 41.7% vs. 42.12%

USDA World Supply-DemandProduction – 772.38 M T. vs. 773.08 – World Carryout – 320.45 M T. vs. 321.45

As far as I’m concerned the USDA was no big deal. Food use was up 5 million bu. and seed use were up 1 million bu. That’s where the drawdown was in the US carryout. The 1.0 M T. drawdown in the Global carryout was due to a noticeable hike in feed usage (global corn is getting expensive). The bottom line to all of this is that today’s USDA wheat numbers were not worth Chgo being up 10-11 cents and KC being up 9-10 cents (just my opinion). Unfortunately when corn and soybeans are screaming higher wheat is not just going to sit there. Once again it’s acting like a follower. Going forward wheat will continue to be on the short end of the inter-market spreads involving long corn and soybeans.

Interior cash wheat markets remain quiet. Export markets remain quiet as well. Spreads in Chgo showed a fractional tightening bias while KC spreads suggested a widening bias. Remember we are still in the midst of index fund rolling. Today was the third day so we still have two more to go.

Because of the strength in corn and soybeans I may have to give up my notion that the wheat market is topping out. I still won’t buy this rally. Because the wheat market is a follower it could easily develop into a trading affair at current levels.  I guess its back to fading short term inter-day extremes for short term trading opportunities.

Daily Support & Resistance – 11/11

Dec Chgo Wheat: $6.00 – $6.19

Dec KC Wheat: $5.56 – $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.