Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 26 ½ cents higher ($7.53 ½), Dec 25 ½ cents higher ($7.64 ¾) & March 25 ½ cents higher ($7.74 ½)

Sept KC Wheat closed 28 ½ cents higher ($7.38 ¾), Dec 28 ¾ cents higher ($7.50 ¾) & March 28 ½ cents higher ($7.59 ½)

Sept Mpls Wheat closed 19 ¾ cents higher ($9.32 ¾), Dec 18 ½ cents higher ($9.19) & March 18 cents higher ($9.08 ½)

Weekly Wheat Export Sales – 293.2 K T. old crop vs. 250-550 K T. expected – no new crop vs. none expected

Highlights of USDA Wheat Production/Supply-Demand ReportUS – lowered yield 1.3 bpa, lowered production 49 M bu., cut domestic usage 11 M bu., left exports unchanged, lowered carryout 38 M bu. – S-T-U now 30.4% vs. 32.1 % last month vs. 40% last season – World – lowered carryin 1.35 M T., cut production 15.49 M T., cut usage 4.22 M T., lowered carryout 12.62 M T.

I really don’t know of anyone that was looking for noticeable cuts in winter wheat and a mostly unchanged number in spring wheat. Harvested acres were left unchanged for spring wheat. If we are to see any changes they will come on the Small Grains report in late September. Granted the US data had a bullish bias but I have to think the majority of today’s rally came from the World data. No one saw the 72.5 M T. crop size coming out of Russia, not even the Russians. The cut in the Canadian crop should not have been that great of surprise. The bottom line is that the World wheat scenario has gotten tight in a hurry. Now we just have to sit back and see who is willing to pay up. I do think the US should now become a viable source despite being uncompetitive for so long. The only drag I see now for US origin is the freight coming out of the US but that should offset by the higher priced overseas wheat. I only have one word of caution going forward; I have never been a fan of chasing the wheat market and I won’t start now. After today’s performance the short term technical read suggests the flat price is deserving of some backing and filling.

Daily Support & Resistance – 08/13

Dec Chgo Wheat: $7.52 – ???

Dec KC Wheat: $7.40 – ???

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