Wheat Commentary


Wheat – Just My Opinion

March Chgo Wheat closed 18 cents lower ($7.77), May 18 ½ cents lower ($7.82 ¼) & July 17 ¼ cents lower ($7.73 ½)

March KC Wheat closed 22 ¼ cents lower ($7.93 ½), May 21 ¾ cents lower ($7.97) & July 20 ½ cents lower ($7.97)

March Mpls Wheat closed 13 ¾ cents lower ($9.02 ½), May 13 ¾ cents lower ($9.00) & July 14 ½ cents lower ($8.95 ¾)

Weekly Wheat Export Sales – 676.7 K T. old crop vs. 200-600 K T. expected – 60.0 K T. new crop vs. 0-100 K T. expected

Weekly wheat export sales came in at a marketing year high. Despite this the recent liquidation phase continued. I have to think the dramatic strength has something to do with today’s dismal performance. The latest from the Russian/Ukraine situation is that the recent dialogue between the representatives (US & Russia) will continue.

Egypt has announced an overnight optional origin tender. It will be interesting to see if either Ukraine and Russia offers and whether or not Egypt bites or will go they go elsewhere. We’ve talked about the strength of the US Dollar and its impact on US exports. In that same vein the Euro has weakened dramatically. I have to think Euro priced wheat will get Egypt’s nod.

Basis levels for wheat remain quiet whether its for domestic us or for export. Both KC and Chgo spreads ease a bit in response to the flat price selling.

I would like to think that the $7.70 level for March Chgo wheat, give or take a nickel, is low enough for the current liquidation run. The same can be said for the March KC against the $7.80 level. It was just two days ago I thought the wheat market was ready to do some downside correcting due to a short term overbought. Now the market is starting to show a short term oversold.

Daily Support & Resistance – 01/28

March Chgo: $7.65 – $7.95

March KC: $7.80 – $8.10

The risk of trading futures and options can be be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.