Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 26 ½ cents higher ($6.35), Sept 25 ¾ cents higher ($6.40 ¾) & Dec 23 ½ cents higher ($6.47 ¼)

July KC Wheat closed 17 cents higher ($6.16), Sept 21 ¼ cents higher ($6.15 ¼) & Dec 20 ¾ cents higher ($6.25 ¾)

July Mpls Wheat closed 46 ½ cents higher ($8.60), Sept 43 cents higher ($8.57 ¼) & Dec 36 ¼ cents higher ($8.43 ½)

Weekly Wheat Export Inspections – 424.3 K T. vs. 240-450 K T. expected

Highlights of the USDA Wheat Production & Supply-DemandUS Total Wheat – lowered carryin 8 M bu., lowered yield 4.9 bpa, lowered production 152 M bu., increased imports 20 M bu., lowered feed 10 M bu., lowered exports 25 M bu., lowered carryout 105 M bu. – Winter Wheat – raised production 54 M bu. – Other Spring – 115 M bu. less than expected, down 185 M bu. vs. year ago.

Trade ideas have the spring wheat ratings stabilizing at the 16% GE level. What’s probably more important are the P-VP levels which last week stood at 50%. The USDA reports the spring wheat is now rated 16% GE (unch) while the P-VP levels stand at 55% (+5%).

Have you heard the adage big crops and get bigger or small crops get smaller? Going forward I wouldn’t be surprised if that’s case for winter wheat (getting bigger) and spring wheat (getting smaller). It needs to be noted that the USDA did not do any harvested acreage adjustment on this report. Most believe that spring wheat acres going forward will be adjusted lower based on abandonment. The trend in th S-T-U continues to tighten; in the 2019/20 marketing year it was 49.2% and now 32.1%. One has to go back to the winter of 2013 to find a carryout projection this as low as the one projected today.

The chart action for both Chgo and KC are advertising they have gone low enough for now. This makes sense considering the Mpls market is on the verge of making new contract highs.

Daily Support & Resistance – 07/13

Sept Chgo Wheat: $6.30 – $6.60

Sept KC Wheat: $6.06 – $6.35

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.