Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 12 cents lower ($6.62 ¼), Sept 11 ¼ cents lower ($6.65 ¾), & Dec 10 ¼ cents lower ($6.70 ¾)

July KC Wheat closed 8 ¾ cents lower ($6.15 ¼), Sept 8 ¼ cents lower ($6.22 ¾) & Dec 7 ½ cents lower ($6.32 ¼)

July Mpls Wheat closed 15 ¾ cents lower ($6.84 ¾), Sept 14 ¼ cents lower ($6.91 ½) & Dec 10 ¾ cents lower ($6.98 ¼)

Weekly Wheat Export Inspections – 573.9 K T. vs. 425-625 K T. expected

US wheat futures continued their slide that started one week ago Thursday. Prospects of a better winter crop not only here in the US but overseas as well continues to weigh on prices. Over he weekend the central western Dakotas saw some decent moisture while the eastern section came up short. Over the weekend Egypt announced an optional origin tender. They wound up taking 240 K T. Romanian wheat. That doesn’t sound like much to me considering they have not taken any wheat in a tender of this sort since early April. I’m guessing their thought is that prices are going lower.

Interior cash wheat prices (basis) continues to be quiet with no changes being seen. This holds true for the export basis as well. Spreads continue to leak wider reflecting the lower prices.

The trade is expecting to see the US winter wheat crop at 50% GE (+2%) rating. The USDA reports the winter wheat crop is now rated 47% GE (-1%). The USDA says 67% of the winter wheat crop is headed vs. the norm of 69%. The trade is expecting to see 94% of the spring wheat crop planted. The USDA reports 94% has been planted vs. the 5-year norm of 85%. 66% of the spring wheat crop has emerged vs. the norm of 56%. The trade is expecting to see the spring wheat crop rated at 57% GE. The range of ideas ran from 45% to 70%. The USDA reports the US spring wheat crop is rated at 45% GE with no comparisons to this week one year ago.

Chgo prices are now back to the level where the last leg higher started; roughly $6.50 to $6.60. In early April July KC prices started to rally from the $5.60 level and topped out at $7.41. Today’s low shows they have given back $1.35 of that rally. Prices for Chgo and KC now read with a minor oversold. I would be a reluctant seller at these current levels. Further weakness I would be fading the break for some sort of bounce.

Daily Support & Resistance – 05/25

July Chgo Wheat: $6.55 – $6.79

July KC Wheat: $6.03 – $6.30

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.