Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 6 ½ cents higher ($4.25), July 7 ¼ cents higher ($4.36) & Dec 4 ½ cents higher ($4.59 ½)

May KC Wheat closed 3 cents higher ($3.89 ¼), July 6 cents higher ($4.00) & Dec 4 ½ cents higher ($4.32 ½)

May Mpls Wheat closed 4 ¾ cents higher ($4.95), July 5 cents higher ($5.12), & Dec 3 ¾ cents higher ($5.35 ¼)

Weekly Wheat Export Sales – Old crop vs. 200-500 K T. expected – New crop vs. 50-350 K T. expected

Oversold considerations coupled with weather woes (too much water) for the SRW areas lifts flat price wheat out of the hole on Wednesday. The HRS areas continue to deal with cold and damp conditions which in turn are hampering seedings in those states. It will be interesting to see how the rest of the World markets reacts to today’s rally as much of our global competition were celebrating the “May Day” holiday. Reports from the Wheat Quality Council tour continue to report strong yields which go far in offsetting the low acres. Forecasts for parts of Oklahoma and Texas are suggesting flooding type rains.

Interior cash wheat markets show a firm undertone from a lack of producer selling. Our one day rally does little to restore any confidence that the lows are in even though I would like to believe we have gone low enough for now. I have to think the flat price short covering had the most to do with the bull spreading that was seen in all three varieties.

Certain technical indicators are trying to suggest we may have gone low enough for now. Unfortunately we have seen these indications before. The only way I know how to approach this market from the long side is to use protective closing sell stops that follow up any bottom picking. For what it is worth July KC can rally 30 cents before encountering any legitimate looking resistance. July Chgo has some minor resistance immediately above today’s closing prices but if we can see above $4.47-$4.48 it would set the stage for a run to $4.60.

Daily Support & Resistance for 05/02

July Chgo Wheat: $4.31 – $4.45

July KC Wheat: $3.95 – $4.10

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.