Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 24 ½ cents higher ($7.97 ¼), March 23 ¾ cents higher ($8.08 ¾) & May 23 cents higher ($8.11)

December KC Wheat closed 20 ¾ cents higher ($8.06 ½), March 21 ¼ cents higher ($8.10 ¼) & May 21 cents higher ($8.09 ¼)

December Mpls Wheat closed 23 ¼ cents higher ($10.75 ½), March 23 ¾ cents higher ($10.56 ¾) & May 25 ¼ cents higher ($10.26 ¾)

Weekly Wheat Export Inspections – 115.3 K T. vs. 150-500 K T. expected

Weekly Winter Wheat Condition & Progress – 45% GE (-1%) vs. 48% expected vs. 43% year ago – Planted – 87% vs. 88% expected vs. 86% ave – Emerged – 67% vs. 68% ave

Flat price wheat surges higher on Monday spurred on by global business. Last Thursday Saudi Arabia announced a 660 K T. tender; it was announced last night they bought nearly twice that amount. Over the weekend Egypt announced another optional origin tender; they bought 180 K T. Russian paying about $4.00-$4.50 higher vs. the 360 K T. they bought last Wednesday. With that news new contract highs were seen in all three varieties. The global news was strong enough to offset the feeble looking weekly export inspections. The lack of export is why KC has been giving it back to the Chgo market. Adding to the correction of the KC/Chgo spread is the simple fact the large speculator and the managed money sector have been net short Chgo wheat. Look at all the money they have left on the table playing the spread vs. being outright long. If I had to guess they are trying to make up for that now. The latest winter wheat crop condition report shows noticeably poor conditions in Texas and in the north-northwest. Planting rates for SRW appear to be behind their respective norms in many states with that window closing fast if not closed already.

Flat price wheat goes home on Monday in an overbought state. The 14-day RSI for Dec Mpls is 85, for Dec KC 71 and for Dec Chgo 72. As I mentioned in the corn comment I get quite suspect of early in the week sharp extremes (such as saw here today). With that said it would be no surprise to see some backing and filling of the recent rally into mid-week.

Daily Support & Resistance – 11/02

Dec Chgo Wheat: $7.80 – $8.05 (?)

Dec KC Wheat: $7.90 – $8.15 (?)

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