Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 9 cents higher ($6.46), Sept 10 ¾ cents higher ($6.51 ½) & Dec 10 ¾ cents higher ($6.58 ¾)

July KC Wheat closed 17 ¾ cents higher $6.18), Sept 17 ¾ cents higher ($6.26 ¾) & Dec 17 ¼ cents higher ($6.36)

July Mpls Wheat closed 20 cents higher ($8.42 ½), Sept 26 cents higher ($8.34) & Dec 20 cents higher ($8.19 ¼)

Weekly Wheat Export Inspections – 285.6 K T. vs. 400-600 K T. expected

Egypt announces an over-the-weekend tender for optional origin wheat – Egypt buys 180 K T. Romanian – paid $242.93 FOB + $27.85 Freight = $270.28

Spring Wheat (Mpls) continues to be the upside leader. Over the weekend not much rain occurred in the Dakotas despite rain occurring in many other places east and southeast of there.  Whatever the acreage report shows for spring wheat on Wednesday the trade will question its accuracy given the ongoing drought conditions. Adding to this are the soggy conditions in the harvest ready areas of the HRW belt. The Chgo market brought up the rear on today’s advances as inter-market spreading, buying “hard”/selling “soft” as well as buying corn and selling Chgo wheat kept their advances in check.

Spring wheat ratings are expected to show an additional decline. Trade expectations have the spring wheat rating decline another 2% to 25% GE. The USDA reports the spring wheat rating at 20% GE (-7%). The winter ratings are expected to be stable to a slight improvement vs. one week ago; 50% GE (+1%). The USDA reports the US winter wheat is now rated 48% GE (-1%). Winter wheat harvest is expected at the 30% complete level. The USDA reports 33% of  the winter wheat had been harvested.

Going forward it will all be about the size of the spring wheat crop. Whatever acreage number the USDA suggests will be moot given the probability of a low yield if not abandoned acres. For what it is worth the trade is expecting to see spring planted acres decline from 11.740 M to 11.408 M. Total US wheat acres are expected to decline from the March intentions. The quarterly stocks figure is guesstimated to be at 859 M bu. This figure will set last year’s final carryout, this year’s carryin.

Daily Support & Resistance – 06/29

Sept Chgo Wheat: $6.35 – $6.65

Sept KC Wheat: $6.10 – $6.40

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.