Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 2 ¼ cents lower ($5.35 ¾), Sept 2 ½ cents lower ($5.40) & Dec 2 cents lower ($5.50 ½)

July KC Wheat closed ¼ cent lower ($4.65 ¼), Sept ¾ cent higher ($4.78 ¼) & Dec 1 cent higher ($4.99)

July Mpls Wheat closed 5 cents higher ($5.48 ½), Sept 3 ¾ cents higher ($5.57) & Dec 3 cents higher ($5.60 ½)

I’m told the extreme heat that just started in Europe is not expected to last beyond next week. The warmth and dryness being experienced in parts of Russia and Ukraine is expected to ease sometime next week. Yesterday it was the current weather in these areas that took us higher. Today it was the forecasts for these areas that dampened the enthusiasm for upside follow through. One of the features of today’s trade was inter-market spreading between the three varieties. Years ago when I was just starting out I was told that whenever the wheat/corn spread got into 20 cents it was a buying opportunity. Chgo wheat has not gotten that tight to corn but the Sept KC wheat vs. Sept corn got into 15 cents last week. It has been only a couple of times in the past 12 years that this spread traded below even money.

Advertised basis levels for standard protein wheat remain quiet. This holds true for the export values as well. Chgo spreads ran mixed to fractionally softer. KC spreads a bit softer out to Dec and then bull spreads took over. Mpls spreads had a friendly look out to Dec.

Sept Chgo wheat comes within 3 ½ cents of last week’s high and closes lower – not friendly. KC wheat has a much different chart picture developing; triangulation dating back to the first of the month. I don’t think anyone trying to be friendly KC will want to see closes below last week’s lows. I’m not sure the USDA can give us anything on Friday to promote sustained higher prices. If wheat prices move higher the input will have to come from elsewhere.

Daily Support & Resistance for 06/26

Sept Chgo Wheat: $5.32 – $5.47

Sept KC Wheat: $4.72- $4.84

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.