Wheat Commentary


Wheat – Just My Opinion

May Chgo Wheat expired 8 cents higher ($4.39 ¼), July closed 11 ½ cents higher ($4.48 ½) & Dec 11 cents higher ($4.70 ¾)

May KC Wheat expired 4 ¾ cents higher ($4.01 ¾), July closed 11 ¾ cents higher ($4.08 ¾) & Dec 12 cents higher ($4.40 ½)

May Mpls Wheat expired 4 ½ cents higher ($5.12 ¼), July closed 5 ¼ cents higher ($5.23 ¼), & Dec 4 ¼ cents higher ($5.45 ¼)

Informa (IEG Vantage) suggests spring wheat planted acres (other than durum) at 12.4 million vs. USDA at 12.8 million

Since short covering was the name of the game elsewhere within the Ag complex the spec shorts in the wheat market were not to be left out. The direct news that I saw was not as friendly as the market action exhibited. Spring wheat planting was further along than originally thought. Our competitors’ prices were nowhere near as strong. Wheat conditions overall continue to be quite good worldwide. I think what we’re seeing in the US wheat futures are a classic example of what happens when the spec gets too short. There is, however, talk of potential disease development due to the excessive wet conditions and this includes areas of the HRW. The old Informa group touted a decrease in spring acres but did suggest a total wheat crop slightly higher vs. what the USDA had to say on Friday. Going forward I still think wheat will remain the weak sister of the Ag complex given the abundant global supply.

The interior cash wheat basis runs mostly unchanged for standard protein wheat. If there is an underlying bias I would think it has a firm tilt to it since nothing is moving despite the two day rally. The Gulf runs steady to firm for HRW while the SRW runs steady to easier. Chgo spreads ran ever so slightly better while KC spreads ran fractionally mixed.

From a technical point of view July Chgo wheat closing above the $4.45 level is suggesting a run to $4.60. The scenario for July KC wheat is not as strong looking as I can tout you technical resistance every 5 cents higher. this makes some sense since the inter-market spread suggests KC continues to lose to Chgo.

Daily Support & Resistance for 05/15

July Chgo Wheat: $4.40 – $4.54 ($4.60)

July KC Wheat: $4.02 – $4.15 ($4.20)

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.