Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 15 ¼ cents higher ($7.25 ½), March 14 ¼ cents higher ($7.36 ½) & May 12 ¾ cents higher ($7.39 ½)

December KC Wheat closed 20 cents higher ($7.31 ¾), March 19 ¼ cents higher ($7.39 ¼) & May 17 ¾ cents higher ($7.41 ½)

December Mpls Wheat closed 9 cents higher ($9.12 ½), March 9 ¾ cents higher ($9.00) & May 10 cents higher ($8.87 ¼)

Weekly Wheat Export Sales – 290.2 K T. old crop vs. 250-550 K T. expected – no new crop vs. none expected

Sept Wheat Quarterly Stocks – 1.780 B Bu. vs. 1.852 B expected

US Wheat ProductionAll Wheat – 1.646 B bu. vs. 1.680 B expected vs. 1.697 in August – Winter Wheat – 1.277 B bu. vs. 1.321 B expected vs. 1.319 B in August – Spring Wheat – 331 M bu. vs. 327 M expected vs. 323 M in August

The USDA cuts wheat production by 51 M bu. and most of it came out of the “winter” production, 42 M bu.. “Spring” production was cut by 12 M bu., less than most were expecting. The quarterly stocks figure was 72 M bu. less than expected. Add this all together and it suggests US wheat prices have a good chance of starting another leg higher. KC futures led the way higher followed by Chgo while Mpls brought up the rear.

I’m not seeing any changes in either the interior or export wheat basis. Intra-market spreads in both Chgo and KC saw improvement in response to the flat price buying. If we do indeed see another leg higher in the flat price I have to think KC will lead the way.

As I have been saying for the past number of days the technical look at US wheat futures appear to be on the verge of another leg higher. The only resistance levels left for Dec KC wheat is $7.35 ½ followed by the August 13th high of $7.69. Chgo prices are nowhere near as strong looking but that is due to the shift in the inter-market spread. When the Dec Chgo was making its high on August 13th it was 17 cents over the Dec KC. Now the Dec KC is 6 cents over th Dec Chgo. The bottom line here is that US wheat futures will follow the overseas trend for wheat prices. European wheat futures are at their contract highs.

Daily Support & Resistance – 10/01

Dec Chgo Wheat: $7.15 – $7.38

Dec KC Wheat: $7.20 – $7.46

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.