Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 2 ½ cents lower ($6.15 ½), July ¾ cent lower ($6.12 ¾) & Sept 1 ½ cents lower ($6.13 ¾)

May KC Wheat closed 7 ½ cents lower ($5.55 ½), July 7 ¾ cents lower ($5.62) & Sept 7 ¾ cents lower ($5.68 ½)

May Mpls Wheat closed 3 ½ cents higher ($6.11), July 3 ¼ cents higher ($6.20) & Sept 3 ½ cents higher ($6.28)

After last week’s USDA report I said the only thing friendly about the wheat numbers were the corn numbers. Now that old crop corn has backed off the wheat market had no place to go other than back to the levels Wednesday’s rally started from. Over the weekend Egypt hosted a tender which closed today. They were offered 1.120 M  T. of wheat of which they took 345 K T. (290 K T. Russian, 55 K T. Ukraine). The amount taken vs. the amount offered tells me they are no real hurry as it suggests most world exporters have near substantial amounts of wheat for sale. In addition the sloppy looking flat price action we saw a fair amount of inter-market spreading. KC was the weak sister evidencing what looks like a decent new crop while Mpls was able to stand in reflecting the ongoing dryness in N. Dakota (not much in the forecast as of this writing). Chgo gets caught in the middle of the two.

Interior cash wheat markets have a mixed look. HRW in Kansas is steady to nothing while HRW in Oklahoma is trying to poke its nose up. I guess there are some last minute needs prior to new crop’s arrival. The SRW basis continues to be quiet. I’m not seeing much happening in the US export markets. May Chgo loses to July ahead of the index fund roll. July forward spreads show some minor tightening. Not much happens with KC or Mpls spreads.

Chgo wheat continues to trade inside last Wednesdays range in a three ay series of higher lows and lower highs. This suggests to me lower prices before we see a sustained rally. Can’t say much about the KC market as it has fully retraced last Wednesday’s rally; not a good sign.

Daily Support & Resistance – 04/07

July Chgo Wheat : $6.00 – $6.20

July KC Wheat: $5.59 (?) – $5.69

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.