Wheat Commentary

storck

Wheat – Just My Opinion

Dec Chgo Wheat expired 14 ¾ cents lower ($5.93 ½), March closed 18 cents lower ($5.96 ½), & July 13 cents lower ($5.94 ½)

Dec KC Wheat expired unchanged ($5.79), March closed 19 cents lower ($5.62 ¼) & July 16 ¼ cents lower ($5.68 ½)

Dec Mpls Wheat expired 11 ¾ cents lower ($5.43 ½), March closed 12 ½ cents lower ($5.57 ½) & July 11 ¼ cents lower ($5.74 ½)

Weekly Wheat Export Inspections – 261.1 K T. vs. 375-650 K T. expected

Egypt announces an overnight tender for optional origin wheat

Last week the wheat trade was about buying the rumor Russia would enact on export tax on its 17.5 M T. export quota beginning on February 15th. Today the wheat trade sold the fact that Russia will indeed enact an export tax ($30.00 T.) on 17.5 M T. export quota beginning on February 15th. What Russia has done has prompted many different points of view. In the near term normal Russian customers will be biased to secure product now before prices go up (Egypt just announced an overnight tender). Domestic prices in Russia were falling sharply today as producers moved to sell wheat they had been sitting on now knowing the country won’t run out. The competition won’t being see much business in the near term but longer term they could when Russia’s quota and export tax kick in.

Interior cash wheat prices (basis) remain quiet. I am told that last week’s rally did prompt a fair amount of new crop selling. The Gulf basis for HRW does little while the export basis for SRW is holding on to its recent gains. Its not rocket science to say wheat spreads eased in the face of the flat price selling (just like they firmed last week in response to all of the flat price buying).

So how does one trade the Friday to Monday whipsaw price action. I’ve been suggesting fading short term inter-day extremes for short term trading opportunities. Other than that approach I feel almost clueless.

Daily Support & Resistance – 12/15

March Chgo Wheat: $5.90 – $6.10

March KC Wheat: $5.55 – $5.75

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.