Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 6 cents lower ($4.72 ¾), Sept 5 ¼ cents lower ($4.80 ¾) & Dec 4 cents lower ($4.94 ¼)

July KC Wheat closed 3 ¾ cents lower ($4.32 ¼), Sept 3 ¼ cents lower ($4.43) & Dec 2 ¾ cents lower ($4.64)

July Mpls Wheat closed ¾ cent higher ($5.43 ¾), Sept unchanged ($5.52) & Dec ½ cent higher ($5.63 ¾)

Weekly Wheat Export Sales – old crop vs. -100+200 K T. expected – new crop vs. 100-500 K T. expected

Flat price wheat sees a second day of profit taking. Most will say its just technical in nature. I’ll say that US wheat is no longer competitive in the world’s export circles given the recent rally. There is lots of talk developing around about the quality of US wheat given the extreme moisture in the HRW areas. The quality of the SRW crop has been suspect almost all spring. In summation; US wheat is too high priced for quality as well as for feed wheat. I’m not saying the rally is over especially if corn prices continue to move higher. The “however” is if the corn rally stalls does anyone really want US wheat?

Advertised basis levels for interior wheat remain mostly steady. I’m told the recent rally did bring out some old crop cash sales. Rail HRW to the Gulf ticks up a bit while barge SRW to Gulf stays strong. Wheat spreads have eased noticeably in Chgo. KC spreads see easing as well just not to the extent seen in Chgo.

So how much more easing can we see in the flat price ahead of the 3-day weekend? $4.65 to $4.60 July Chgo may have me taking a flyer for a short term purchase. The same can be said for July KC between $4.25 and $4.20.

Daily Support & Resistance for 05/23

July Chgo Wheat: $4.63 – $4.83

July KC Wheat: $4.22 – $4.43

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.