Wheat Commentary

storck

Wheat – Just My Opinion

Sept Chgo Wheat closed 5 ¾ cents lower ($7.08 ¾), Dec 6 ½ cents lower ($7.19 ¾) & March 7 ¼ cents lower ($7.30 ½)

Sept KC Wheat closed 5 ½ cents lower ($7.09 ¾), Dec 5 ½ cents lower ($7.17 ½) & March 5 ½ cents lower ($7.26 ½)

Sept Mpls Wheat closed 5 ¼ cents lower ($9.10 ¼), Dec 4 ¼ cents lower ($9.08 ¼) & March 4 ¾ cents lower ($8.96 ½)

USDA Announces Wheat Export Sale – 327.3 K T. HRW to Nigeria

Weekly Wheat Export Inspections – 381.5 K T. vs. 150-525 K T. expected

Weekly Winter Wheat ProgressPlanted – 5% vs. 4% expected vs. 3% 5-year ave

Weekly Spring Wheat ProgressHarvested – 95% vs. 95% expected vs. 83% 5-year ave

Despite the announced sale of HRW to Nigeria wheat futures were unable to hold on to their Monday night gains. Dec Chgo wheat traded 7 cents higher Monday night before falling to 14 cents lower during the day on Tuesday. Weak corn and soy prices added to the day’s selling as did the strong US dollar. Another noticeable feature was the buying of hard wheat (KC & Mpls) while selling soft wheat (Chgo). At one point during the day Dec KC traded 2 ¾ over Chgo before settling back to 2 ¼ under. I believe this trend should continue given the short fall in the HRS sector. Be advised that Friday’s USDA report will not feature a US wheat production update. That will happen at the end of the month on their small grains report.

My technical view of the wheat futures is they appear to be marking time before the longer term uptrend resumes. The Mpls market has gone sideways just below recent highs. This sideways motion does not resemble a top. We are not going to find any more wheat (the old Informa group suggests we are going to lose more on subsequent production updates). The KC market looks like a downflagging effort with support being noted at the $7.00 (Dec). The Chgo market is the weakest of the three with support being seen near its 50% retracement level of $7.02.

Daily Support & Resistance – 09/08

Dec Chgo Wheat: $7.10 – $7.32

Dec KC Wheat: $7.05 – $7.35

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.