Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 1 ½ cents higher ($6.83 ¾), Sept ¾ cent higher ($6.89 ¾) & Dec ¼ cent lower ($6.97 ¼)

July KC Wheat closed 4 ½ cents higher ($6.40 ¼), Sept 5 ¼ cents higher ($6.48 ½) & Dec 4 ¾ cents higher ($6.57 ¼)

July Mpls Wheat closed 11 ¼ cents higher ($7.75 ½), Sept 12 cents higher ($7.81 ¾) & Dec 11 ¾ cents higher ($7.83 ¼)

Weekly Wheat Export Sales – 325.9 K T. old crop (2021/22) vs. 200-450 K T. expected – no new crop (2022/23) vs. none expected

USDA Wheat Production – increased winter wheat production by 27 M bu. increased total wheat production by 26 M bu. – looks like no adjustments for original spring wheat production

USDA Supply-Demand HighlightsUS – lowered old crop carryout by 20 M bu. by raising exports a like amount – lowered new crop carryout by 4 M Bu. due to the lower carryin which offset the higher production by +6 M Bu. and then increased exports by 10 M bu. – World – lowered old crop carryout by 1.2 M T., increased global production by 5.5 M T., increased total usage by 2.5 M T., increased carryout by 1.9 M T.

The “wow” volatility was seen after the wheat report as well but not quite the wide/wild swings seen elsewhere in the Ag complex. Initially after the report Sept Chgo wheat traded 5 cents higher and moments later traded 9 cents lower. and then retraced that break by 11 cents. The balance of the session was spent trading between 2 cents higher and 3 cents lower. The Sept KC saw similar price swings but at higher levels. It initially traded 12 cents higher followed by a break to 3 cents lower. The balance of the session was spent trading between 8 cents higher and 1 cent higher.

So what does it all mean? Since the idea of a lower spring wheat crop was not addressed in the total wheat production figure it will be next month. With that said the Mpls market was our upside leader and KC followed but toa lesser extent (after all they are both “hard” varieties). Chgo winds up playing second fiddle to these contracts since it is a “soft” contract. In other words buy hard and sell soft. As we go forward the debate will continue as to how much spring wheat may have been lost through yield and acres. The bottom line – wheat prices should be biased to move steady to higher until we have a better handle on the spring production.

Daily Support & Resistance – 06/11

Sept Chgo Wheat: $6.80 – $7.05

Sept KC Wheat: $6.37 – $6.60

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