Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 6 cents lower ($6.87 ½), Sept 4 ¾ cents lower ($6.92 ½) & Dec 3 ¼ cents lower ($7.00)

July KC Wheat closed 3 ¾ cents lower ($6.33 ¾), Sept 3 ¼ cents lower ($6.41 ¾) & Dec 2 ¾ cents lower ($6.53 ½)

July Mpls Wheat closed 11 ½ cents higher ($7.83), Sept 12 ¾ cents higher ($7.88 ¼) & Dec 13 cents higher ($7.90 ¼)

Mpls wheat continues to move higher as the big heat over the Dakotas for the next number of days looms large. The Chgo and KC markets take a breather on Wednesday from recent gains. By no means should Wednesday’s performance in the Chgo and KC markets be viewed as bearish considering the small retracements vs. the sharp gains on Tuesday. As long as the spring wheat crop remains threatened the price action in the KC and Chgo markets should be no worse than similar to today’s price action.

Not much happens with the interior SRW basis or for that matter its export basis. Chgo spreads continue to leak. It seems we are looking small index fund rolling just like we are seeing in the corn market. KC spreads continue to leak fractionally from under similar circumstances. The HRW interior basis, however, is seeing some slight increases as end-users are getting antsy for harvest to start. Not much happens with the HRW export basis.

After Tuesday’s sharp rally the Chgo and KC markets were ripe for some consolidation. Given what’s happening in the spring wheat market Chgo and KC should be no worse than continued consolidation with an underlying bias to move higher. Next week’s wheat production report will hopefully shed some light on whether or not the winter crop is big enough to offset the probable losses we are seeing in the spring crop. Bottom line – I’ll still advocate buying breaks in Chgo and KC as long as the corn and spring wheat markets are showing a higher bias.

Daily Support & Resistance – 06/03

July Chgo Wheat: $6.80 – $7.18

July KC Wheat: $6.25 – $6.50 ($6.60)

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