Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 3 cents higher ($4.38 ¾), July 3 ¼ cents higher ($4.45) & Dec 3 cents higher ($4.68 ¼)

May KC Wheat closed 2 ¾ cents higher ($4.14 ½), July 2 ¾ cents higher ($4.21) & Dec 3 ¼ cents higher ($4.52 ¼)

May Mpls Wheat closed 2 cents higher ($5.11 ¼), July 1 ½ cents higher ($5.19 ½), & Dec ¾ cent lower ($5.43)

July Chgo wheat comes within 3 ½ cents of its contract lows Monday night. Minor short covering during the day session kept prices on the plus side of the day. July KC saw a new contract low Monday night but short covering during the daytime hours managed to give us a slightly higher close. July Mpls wheat matched Monday’s contract low and it too saw a minor bounce during the daytime hours to finish slightly higher on the day. Overall it was not a bad performance given the strength in the US Dollar; new contract highs over there. Overall the condition of the developing crops from the World’s major exporters continues to be in good conditions. There is some concern about dryness in parts of Europe and regions east of there but supposedly there is rain in their respective forecasts.

Most interior cash wheat markets (basis) are steady. There are a couple of HRW locations that are showing a slightly better basis but so far no one is biting. The interior wheat basis has done very little in trying to offset the lower flat prices. This scenario holds true for the export markets. Chgo spreads ran steady through December. KC spreads showed a bit of a bearish bias on the day.

So – are today’s minor reversals going to be any good going forward? The strength in the US Dollar is working against the market. Good crop conditions are working against the market. The Spec appears to be a complacent short. Have we gotten to the point where it’s the darkest before the dawn? If we do stage a rally it will be led by the competition as the US remains a secondary market.

Daily Support & Resistance for 04/24

July Chgo Wheat: $4.38 – $4.50

July KC Wheat: $4.13 (?) – $4.27

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.