Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 3 ½ cents higher ($6.16 ¾), July 2 ¾ cents higher ($6.12) & Sept 2 ½ cents higher ($6.12 ½)

May KC Wheat closed 1 ¼ cents higher ($5.69 ½), July 1 cent lower ($5.75 ½) & Sept ¾ cent higher ($5.81 ¾)

May Mpls Wheat closed 3 ¼ cents lower ($6.10 ¾), July 2 ¾ cents lower ($6.20 ½) & Sept 3 ¼ cents lower ($6.27 ¾)

Weekly Wheat Export Inspections – 302.1 K T. vs. 350-600 K T. expected

Modest short covering ahead of Wednesday’s data supports Chgo and KC wheat futures on Monday despite a feeble looking inspection number and a stronger US Dollar. I believe what we saw was position squaring ahead of Wednesday’s reports as well as month end and quarter end. Not only did we see flat price short covering but we also saw inter-market spread short covering; covering short wheat vs. long soybeans and corn. Couldn’t help but notice a correction in the Mpls wheat vs. KC and Chgo spreads. In recent weeks Mpls wheat has been a steady gainer vs. these other two markets. 1.272 B bu. is the expected number for wheat quarterly stocks. If the number comes in lower I would assume it would be from better wheat feeding. As far as acres are concerned all eyes will be on the spring number (11.664 M) as many expect a noticeable decline due to additional corn and soybean acres.

Advertised basis levels for standard protein wheat don’t do much. This holds true for Gulf values as well. I am told basis levels for higher protein are jumping higher. Chgo spreads showed some minor improvement while KC spreads ran fractionally higher.

Chart based support prompts short covering. This technical buying should continue to support the futures market until we see what the USDA has to say concerning both the old crop and new crop on Wednesday.

Daily Support & Resistance – 03/30

May Chgo Wheat : $6.10 – $6.25

May KC Wheat: $5.61 – $5.78

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.