Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 10 ½ cents lower ($5.03 ½), Sept 8 ½ cents lower ($5.03 ¼) & Dec 8 ¾ cents lower ($5.15 ½)

July KC Wheat closed 10 ¾ cents lower ($4.24), Sept 11 ½ cents lower ($4.32 ½) & Dec 12 cents lower ($4.55)

July Mpls Wheat closed 13 ¼ cents lower ($5.30), Sept 8 ¼ cents lower ($5.36 ¼) & Dec 7 cents lower ($5.51)

Egypt announces an overnight tender for optional origin wheat – overnight Egypt buys 60.0 K T. Romanian wheat – US was not offered

The ongoing harvest in the HRW areas weighs on all of the varieties on Tuesday. The lack of US offers at the overnight Egyptian tender added to the bearish sentiment. I continue to hear of better yields not only in the HRW areas but also in the southern SRW areas. The overall sentiment to the World wheat market is that winter crop is being harvested in the major northern hemisphere markets and the respective spring crop looks to be in decent shape despite some minor selected loses.

Where harvest is happening those locations are looking at lower basis levels. Cash selling has slowed down a bit with the break in the futures. Spreads in both Chgo and Mpls are showing a negative bias while KC spreads appear fractionally better. As long as the wheat market is in a liquidation phase I can’t imagine putting on much of a performance vs. what we’ve recent seen (meaning prior to the current break).

Intra-day and inter-day indicators are starting to read rather low. With that said expect to see not much more downside without seeing a decent bounce first. Daily technical data still reads clearly lower but that doesn’t mean it goes down every day. Something close to $4.95 should act as near term support for Sept Chgo wheat. I would be surprised to see Sept KC wheat trade much lower vs. what we are seeing now without some sort of a bounce first.

Daily Support & Resistance for 07/03

Sept Chgo Wheat: $5.04 ($4.99) – $5.24

Sept KC Wheat: $4.37 ($4.32) – $4.57

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.