Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 13 ¼ cents higher ($4.78 ¼), Sept 14 cents higher ($4.85 ¼) & Dec 13 ½ cents higher ($4.97 ¾)

July KC Wheat closed 14 ¼ cents higher ($4.34 ½), Sept 14 cents higher ($4.45) & Dec 13 ½ cents higher ($4.65 ½)

July Mpls Wheat closed 15 ¾ cents higher ($5.43 ½), Sept 15 ¾ cents higher ($5.52 ½) & Dec 15 ¾ cents higher ($5.64 ½)

Weekly Wheat Export Inspections – 757.7 K T. vs. 400-600 K T. expected – 23.579 M T. year-to-date vs. 25.17 M T. Target

Weekly Winter Wheat Condition & Progress – 66% GE (+2%) vs. 63% expected vs. 36% year ago – Headed – 54% vs. 66% 5-year average

Weekly Spring Wheat Progress – Planted – 70% vs. 63% expected vs. 80% 5-year average – Emerged – 26% vs. 51% 5-year average

July Chgo wheat registers its best price and close dating back to late February. The KC contract was initially the upside leader but by the close that was taken over by the Mpls contract. There all sorts of concerns with the US wheat crop this year. In the beginning it was the SRW crop due to excessive moisture. Concerns over timely planting for the HRS boosted the Mpls contract. Today the KC contract got its boost from the excessive moisture that is happening in the heart of the Kansas HRW crop. It’s hard to imagine the rally in the Chgo and KC wheat markets are only one week old. From last Monday’s low to today’s high July KC wheat has rallied 65 ½ cents and July KC 57 ¾ cents. the Mpls contract has been slower to respond to its respective concerns; up only 40 ¾ cents since its low was made on April 30th. It has to be noted that these US crop scares have taken US origin out of competition with the rest of the global exporting nations. Most of the US exporting competition has relatively good looking wheat crops. In summation; if the US markets are to continue to rally crop scares have to continue. In case you don’t already know speculative short covering accounts for the rally’s best buying. On a side note – why do importers of US wheat wait until the end of our marketing season to take their shipments? Today’s wheat inspections were either the 2nd or 3rd best of the season. The US marketing season ends later this month.

Advertised basis for standard protein cash wheat runs unchanged but with an underlying firm tone. Despite the recent flat price rally there has been few new cash sales. The Gulf doesn’t do much for either HRW or SRW. Chgo spreads ran mixed on the day; July loses to Sept while Sept gains on its forward contracts. KC spreads saw fractional improvements July forward.

I would have liked to see July Chgo wheat close above $4.80 but it did not. July KC wheat has resistance all the way up to $4.60. Today’s improved winter wheat crop vs. the expectation of a slight down turn coupled with spring wheat planting coming in better than expected suggests the wheat market will be in line for some downside retracement over the near term.

Daily Support & Resistance for 05/21

July Chgo Wheat: $4.69 ($4.65) – $4.81

July KC Wheat: $4.25 ($4.20) – $4.38

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.