Wheat Commentary


Wheat – Just My Opinion

December Chgo Wheat closed 9 ½ cents higher ($8.12 ½), March 9 ¼ cents higher ($8.24 ¼) & May 9 ¾ cents higher ($8.27 ¼)

December KC Wheat closed 10 ½ cents higher ($8.28), March 9 cents higher ($8.30 ¾) & May 8 ¼ cents higher ($8.29 ¾)

December Mpls Wheat closed 7 cents higher ($10.53 ¼), March 9 ¼ cents higher ($10.46) & May 10 ¼ cents higher ($10.26)

Weekly Wheat Export Sales – old crop vs. 200-500 K T. expected – new crop vs. 0-10 K T. expected

New contract highs and closes for both Chgo and KC wheat. Mpls has become the weak sister but I’m thinking that may be due recent index fund rolling. The Mpls market has no where near the liquidity that Chgo and KC have and that’s my rationale for it lagging in recent days. If I’m right about the fund rolling I fully expect Mpls to come back into the limelight. Not a lot of new news today other European prices staying firm in response to the weaker Euro. Russia remains supportive with recent statements about export curbs after the first of the year and the possibility of higher export duties. The bottom line is that the global wheat scenario stays tight and that will remain supportive to US prices.

Interior basis levels for HRW stay firm and that prompts some tightening of the KC spreads. Chgo also saw some minor tightening even though interior SRW basis levels don’t do much. The export markets for both varieties are steady but firm.

While there is nothing bearish about new contract highs and closes it does open the door for some volatility intra-day. We saw a great example of that today when prices were sharply higher early and then corrected by midday. As much as I think wheat prices still have some great potential to move higher into December and January timing is everything unless one has fortitude to with stand  potentially vicious corrections. Weekly export sales are out in the morning and unfortunately our export sales have not been much to write home about. Export sales are expected to be in the same range as we was last week when 400.1 K T. were reported. US prices will continue to take there cue from overseas prices but be open to bumps in the road due to the strong US dollar which works to keep US prices from being competitive.

Daily Support & Resistance – 11/12

Dec Chgo Wheat: $7.90 – $8.10 (?)

Dec KC Wheat: $8.05 – ???

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