Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 4 ¼ cents higher ($5.26 ½), Sept 5 cents higher ($5.31 ¾) & Dec 5 ½ cents higher ($5.41 ½)

July KC Wheat closed 3 cents higher ($4.60 ½), Sept 2 ¾ cents higher ($4.70 ¾) & Dec 1 ½ cents higher ($4.91 ½)

July Mpls Wheat closed 3 ¼ cents lower ($5.38 ¼), Sept 3 cents lower ($5.45 ½) & Dec 3 ½ cents lower ($5.57 ½)

Weekly Wheat Export Sales – 187.6 K T. old crop vs. 200-500 K T. expected – no new crop vs. none expected

Weekly wheat export sales stunk but that should be no surprise given the US’s lack of competitiveness in the global export circles. We know the quality of the SRW crop is thought to be in serious condition and current short term forecasts don’t help. There is a bit of concern around the quality of the HRW crop but not to the extent vs. the SRW crop. Chgo is the most emotional market as it gets the majority of the spec play. Today they were riding on the coattails of the strength in the corn and soybean markets although not as strong. As you can notice Chgo was the strongest and Mpls the weakest; Mpls getting the least of the spec’s attention. World weather for the major wheat exporters has a mixed look to it. Canadian Prairies are expected to see beneficial rain over the near term. The western European wheat areas are expected to see some blistering heat and the Black Sea region continues to show a dry bias.

I’m not seeing any changes in posted interior wheat basis levels and for that matter for the Gulf as well. Chgo spreads had a bit of a bearish bias but I’m not sure how much that may be tied to July option expiration tomorrow. KC spreads, on the other hand, showed a bullish bias. I’m thinking it may be tied to the slow rate of harvest as well as slow producer selling.

Flat price wheat honors suspected interim support. I’m not sure it can go much higher vs. what we saw earlier this week unless corn and soybeans go bananas on the upside. $5.35 – $5.40 July Chgo should be decent resistance for the near term. Since the KC market has a less strong picture its upside appears to be far more limited but with greater downside potential.

Daily Support & Resistance for 06/21

July Chgo Wheat: $5.15 – $5.34

July KC Wheat: $4.50- $4.70

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