Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat closed 12 ¼ cents higher ($4.31 ¼), July 12 ¼ cents higher ($4.37) & Dec 11 ½ cents higher ($4.59 ¾)

May KC Wheat closed 17 ¾ cents higher ($3.97), July 10 cents higher ($3.97) & Dec 9 ½ cents higher ($4.28 ½)

May Mpls Wheat closed 1 cent lower ($5.07 ¾), July 1 cent higher ($5.18), & Dec 1 ½ cents higher ($5.41)

Weekly Wheat Export Inspections – 842.4 K T. vs. 400-600 K T. expected – Cumulative 22.785 M T. vs. 25.17 M T. target

Weekly Winter Wheat Condition & Progress – 64% GE vs. 64% expected vs. 36% year ago – Headed – 42% vs. 54% 5-year average

Weekly Spring Wheat Progress – 45% planted vs. 35% expected vs. 67% 5-year average – Emerged – 10% vs. 34% 5-year average

The wheat market has the least to lose in the Chinese/US rift (China doesn’t import much wheat) so it was the first to rally from a short term oversold scenario. If I’m not mistaken the weekly wheat export inspections were the best of the current marketing year which will come to a close at the end of May. I think the buying started with inter-market spreading; buying wheat and selling everything else against it. Crop conditions for the SRW crop remain highly questionable. It continues to be a rough road for spring wheat planting event though the Mpls market struggled when it got higher on the day. The HRW is thought to be maintaining its good condition as is our competitors wheat crop.

Not much happens with the interior cash wheat market. From last week it shows a slight firming bias due to a lack of fresh producer sales. the Gulf for both SRW and HRW firm in response to the slow sales. Today’s spec short covering buoyed the spreads in both KC and Chgo but not in MPLS. Spreads will be biased to continue to firm as long as specs continue to cover shorts.

July Chgo wheat registers an impressive looking “key” reversal – an outside day involving new contract lows and closing above the previous day’s high. The KC market had just a minor reversal as it it did not register an outside day with closes above the previous high. If today’s reversals hold true any 50%-60% retracement of today’s rally should find support.

Daily Support & Resistance for 05/14

July Chgo Wheat: $4.30 – $4.45

July KC Wheat: $3.90 – $4.05

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.