Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 11 cents higher ($8.10 ¾), Dec 10 cents higher ($8.26 ¼) & March 8 ½ cents higher ($8.41 ¼)

Sept KC Wheat closed 16 ½ cents higher ($8.89 ¼), Dec 15 ¼ cents higher ($8.92) & March 15 cents higher ($8.97 ¼)

Sept Mpls Wheat closed 15 ½ cents higher ($9.21 ¾), Dec 15 ¾ cents higher ($9.35) & March 16 ¼ cents higher ($9.47 ½)

Weekly Wheat Export Sales – 359.1 K T. old crop vs. 200-600 K T.

So what’s bullish about US wheat futures? The only bullish influence I can find is the strength elsewhere within the US Ag complex. I’m not expecting anything radical from the USDA as to US wheat data. World data should be interesting given the EU should be looking at production reductions as should India even though India is not much of a world player. Ukraine production ideas will be anyone’s guess now that a modest export campaign has resumed. It will be interesting to see what the USDA does with the Russian production. Last month the USDA had them at 81.5 M T. and now many agencies are suggesting a 90.0-95.0 M T. crop. Maybe I’m out in left field but I have to think wheat belongs on the short side of most inter-market spreads due to our lack of market making export business.

Cash wheat markets don’t do much. If one finds better basis levels it’s due to slow producer selling not so much demand. Bull spreads were working in Chgo as shorts were being covered from both the spec and managed money. Spreads also so a friendly bias in KC as the spec is a very small short over here. Mpls spreads don’t do much.

Wheat charts are trying to turn higher but so far it appears to be a struggle. Closes above $8.20 (Sept Chicago) will suggest better rally potential. The KC market appears to be further along with its effort to suggest an interim low is in place. If corn and beans rally wheat will go along for the ride.

Daily Support & Resistance – 08/12

Sept Chgo: $7.80 – $8.45

Sept KC: $8.50 – $9.15

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.