Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed ¾ cent higher ($4.31 ¼), July ½ cent lower ($4.39) & Dec 1 ¼ cents lower ($4.61 ¼)

May KC Wheat closed ½ cent lower ($3.94 ¼), July ½ cent lower ($4.03 ½) & Dec 1 ½ cents lower ($4.34 ½)

May Mpls Wheat closed ¼ cent lower ($5.08 ¼), July 1 ¼ cents lower ($5.20 ½), & Dec ¾ cent lower ($5.42)

Weekly Wheat Export Sales – old crop vs. 75-250 K T. expected – new crop vs. 100-350 K T. expected

In terms of closing price changes the wheat markets gave us the best performance today as most of their losses were just fractional. I didn’t see anything real positive to the US wheat markets but it is my opinion US wheat has the least to lose or gain pending the outcome of the China/US trade talks. China hasn’t been much of factor in the US wheat markets for some time now. News from our competitors was bearish. Russia (SovEcon) is suggesting this year’s wheat harvest will be 83.4 M T. vs. last year’s 71.69 M T. (USDA). Russia’s Ag Ministry is proposing to extend zero tariffs on their wheat exports which are scheduled to expire this July. Many parts of the Western Europe wheat regions have had a dry bias but rains appear to be coming at an opportune time. On Friday the USDA will remind us of plentiful supplies not only in this country but globally as well.

The interior basis for SRW is showing some easiness which I don’t really understand given the reports regarding quality. The advertised basis for standard protein HRW remains quiet. The Gulf remains quiet as well. Spreads in both Chgo and KC had a very slight bullish bias to them. I’m getting the idea that end users may be getting nervous as US producers have absolutely no interest in making any new crop sales.

The price action is advertising consolidation just above recent contract lows. The spec trade is a big time short here just like they are in the other Ag markets. My guess is they are waiting to see how everything pans out on Friday as to whether or not they need to cover shorts or press the market further. Needless to say I’m on the sidelines here as well.

Daily Support & Resistance for 05/09

July Chgo Wheat: $4.30 – $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.