Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 7 ¼ cents lower ($7.73 ¾), March 6 ½ cents lower ($7.86 ¼) & May 5 ¾ cents lower ($7.90 ¾)

December KC Wheat closed 4 ¾ cents lower ($7.86), March 4 ½ cents lower ($7.89 ½) & May 3 ¾ cents lower ($7.90 ¼)

December Mpls Wheat closed 27 cents lower ($10.17), March 25 ¾ cents lower ($10.01 ¼) & May 23 ¾ cents lower ($9.78 ¼)

Weekly Wheat Export Sales – 400.1 K T. old crop vs. 180-500 K T. expected – no new crop vs. 0-20 K T. expected

The Mpls wheat market continues to liquidate and in turn weighs on the Chgo and KC wheat markets. Other than profitaking based on technical considerations I did not see anything to prompt the continued sharp decline. I thought weekly export sales were okay based on expectations; shipments still leave a lot to be desired. I’ll grant you the pace of sales is lagging last year’s pace by 3.7 M T. but the USDA has already suggested sales for the current marketing will lag last year’s sales by 3.18 M T.

Interior cash wheat markets read mixed as locations tend to differ. Basis levels out of Kansas read steady to better while basis levels in Oklahoma read lower. The HRW rail basis to the Gulf continues to show a firm tone. The SRW basis at the Gulf has now jumped 25 cents over the past 3 days. Spreads in Chgo show a widening bias within the current crop year while the new crop is losing to the old crop. KC spreads show a similar scenario.

Going forward wheat prices still show room to break further before decent looking technical support is challenged. The best looking support for Dec Chgo is the $7.60 level. The same holds true for Dec KC but I’m thinking this market will find support sooner than the $7.60 level due to its inverse against the Chgo market. Granted it’s still a bit early to talk December deliveries but I would be surprised to see any against the KC and Mpls markets. As of this writing I don’t have a good handle on possible Chgo deliveries. Trade guesses for next Tuesday’s supply-demand report are not looking for any notable changes in carryout; both US and World. I only have one question and that is in regard to the Russian crop size. The other day it was thought/reported Russia has harvested 78.0 M T. of wheat. Last month the USDA suggested 72.5 M T.

Daily Support & Resistance – 11/05
Dec Chgo Wheat: $7.64 – $7.86
Dec KC Wheat: $7.76 – $7.98

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