Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed ½ cent higher ($4.78 ¾), Sept ¾ cent higher ($4.86) & Dec ½ cent higher ($4.98 ¼)

July KC Wheat closed 1 ½ cents higher ($4.36), Sept 1 ¼ cents higher ($4.46 ¼) & Dec 1 ¼ cents higher ($4.66 ¾)

July Mpls Wheat closed ½ cent lower ($5.43), Sept ½ cent lower ($5.52) & Dec 1 ¼ cents lower ($5.63 ¼)

Big time rains in Kansas and Oklahoma (HRW), fears of poor quality if not abandonment for SRW and poor germination (cool & wet) for the recent planted HRS has US wheat futures trading to new highs for the current rally. The day’s highs were set just before mid-morning followed by profit taking. At one point July Chgo was 18 cents off of its highs, July KC off 22 cents from its high and July Mpls off 14 cents from its high. As in corn volatility has jumped with the rally opening the door for intra-day corrections such as this. I will once again remind you that the current rally has killed any chance of US origin for export. Forecasts suggests the big-time rains will be around at least until the early mid part of next week. These forecasts should keep the wheat market from totally falling apart but I do question the need for another round of new highs. Today’s suggestion by the administration suggesting a $0.63 direct payment to the wheat producer should act as a catalyst to the spring wheat producer to do whatever it takes to get his crop planted

I’m told old crop cash wheat has begun to move on the current rally. Advertised basis for standard protein really hasn’t changed. The export market for HRW is steady while the export market for SRW has jumped 15 cents in the past couple of days. I have to think the jump is in response to poor SRW quality as well as fears river problems may soon again develop. Most HRW is railed to the Gulf for export. Upfront Chgo spreads ran steady while July, Sept and Dec all gained noticeably against March forward. KC spreads were mostly steady on the day.

The wheat price action we saw on Tuesday is advertising it’s time for some backing and filling; at least some consolidation. Another 8-10 cents down from today’s low can be viewed as a short term buying opportunity.

Daily Support & Resistance for 05/22

July Chgo Wheat: $4.69 ($4.65) – $4.87

July KC Wheat: $4.25 ($4.20) – $4.45

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.