Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 6 ¼ cents lower ($6.49 ½), May 5 ½ cents lower ($6.54) & July 2 cents lower ($6.41)

March KC Wheat closed 6 cents lower ($6.33 ½), May 5 cents lower ($6.38 ½) & July 5 ½ cents lower ($6.39 ¼)

March Mpls Wheat closed 8 ¾ cents lower ($6.26 ½), May 8 ¾ cents lower ($6.37 ½) & July 7 ¾ cents lower ($6.45 ¼)

USDA Wheat Supply-Demand Highlights

US – left US carryout unchanged – just what the trade was expecting – increased HRW carryout 28 M bu. – lowered HRS carryout 21 M bu. – increased SRW carryout 1 M Bu. – lowered white carryout 10 M bu. – increased durum carryout 2 M bu.

World – lowered World carryout 8.97 M T. vs. a decline of 330 K T. expected – World wheat feeding increases by 5.4 M T. while total world usage increases by 9.78 M T.

The US wheat carryout was neutral to bearish; no shortage of wheat here in the US. The World wheat carryout was bullish. It seems the world trade is thinking corn prices are too high and they are trying to substitute feeding wheat wherever they can. I’m not sure I can recall a wheat market that was bullish due to extended wheat feeding. That seems like more of an inter-market spread play. The current weather scenario for US winter wheat is bullish.

Interior cash wheat markets are quiet. The export market for wheat is quiet. Chgo spreads had a bearish bias in the old crop and a bigger bearish bias vs. the new crop. KC spreads were a mixed event. I’ve got no axe to grind one way or the other here.

So what does one do with the mixed information the USDA gave us? The Artic temperatures should provide with some support is the flat price tries to sell off in the near term. Longer term it will be about the new crop; not the old crop. So in the meantime I’ll put my trading shoes back on and focus on fading short term inter-day extremes for short term trading opportunities.

Daily Support  & Resistance – 02/10

March Chgo Wheat : $6.40 – $6.60

March KC Wheat: $6.25 – $6.45

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.