Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 12 cents higher ($5.38), Sept 11 ¾ cents higher ($5.42 ½) & Dec 11 cents higher ($5.52 ½)

July KC Wheat closed 13 cents higher ($4.65 ½), Sept 13 cents higher ($4.77 ½) & Dec 12 ½ cents higher ($4.98)

July Mpls Wheat closed 7 ½ cents higher ($5.43 ½), Sept 9 ¼ cents higher ($5.53 ¼) & Dec 3 ½ cents higher ($5.57 ½)

Weekly Wheat Export Inspections – 406.3 K T. vs. 300-500 K T. expected

Weekly Winter Wheat Condition & Progress – 61% GE (-3%) vs. 63% expected vs. 37% year ago – Harvested – 15% vs. 19% expected vs. 34% 5-year average – Headed – 94% vs. 99% 5-year average

Weekly Spring Wheat Condition & Progress – 75% GE (-2%) vs. 77% expected vs. 77% year ago – Headed – 7% vs. 29% 5-year average

In terms of strength US wheat futures were the club house leader on Monday led by the KC contract. Supporting issues were the developing heat wave in Europe, the ongoing dry bias in the Black Sea region, concerns over the US SRW crop (drowned out?) and recent rainfall impacting the harvest ready HRW. I have to think speculative short covering continues while the managed sector is getting longer; both in Chgo. As far as the KC market is concerned it’s all short covering from both specs and funds. It seems like Chgo will trade the day-to-day goings on while the KC market appears to be more about the longer term global scenario.

Advertised basis levels for standard protein wheat appear to be running unchanged with late last week. This holds true for the export markets as well. It doesn’t appear that too much harvesting was done in the eastern reaches of the HRW areas over the weekend as that is where it was the wettest. It’s the western reaches of the HRW belt that holds the majority of wheat and rainfall in that area was noticeably less. Spreads in all three varieties showed a bullish bias on Monday and that reflected the spec buying as most funds trade in the nearby. Deliveries at the end of the week could be interesting given the concerns around the quality of the new crop.

It is my opinion that Chgo futures will test the highs we saw early last week but I question if we can take those highs out. KC futures are nowhere near as strong as Chgo but to see this market another 10 cents higher over the near term is not out of the realm of possibility.

Daily Support & Resistance for 06/25

Sept Chgo Wheat: $5.30 – $5.53

Sept KC Wheat: $4.66- $4.88

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.