Wheat Commentary


Wheat – Just My Opinion

July Chgo Wheat closed 24 ½ cents higher ($5.36 ¼), Sept 16 ¾ cents higher ($5.21 ½) & Dec 16 cents higher ($5.32 ¾)

July KC Wheat closed 20 cents higher ($4.61 ¼), Sept 20 cents higher ($4.61 ½) & Dec 18 ¾ cents higher ($4.81 ¼)

July Mpls Wheat closed 12 ½ cents higher ($5.35), Sept 12 ½ cents higher ($5.41 ¼) & Dec 12 ½ cents higher ($5.54 ½)

Weekly Wheat Export Sales – 284.4 K T. old crop vs. 250-550 K T. expected – no new crop vs. none expected

US wheat production data comes in slightly higher than expected while ending stocks’ projections come in lower than expected due to a decrease in carryin and a higher export projection. The biggest supporting issue came from the World data. 5 out of 6 US export competitors reported higher production data. World production declined by 9.37 M T. leading to an ending stocks projection decline of 7.88 M T. Since winter wheat is ongoing in most global areas concerns over the spring wheat crops will garner the most attention going forward. If we see further decreases in global production it will come from these.

It’s the eastern SRW crop that is making the market which leads to a stronger basis. I still hear of concerns over quality as evidenced by the squeeze in the July Chgo. We have yet to see any deliveries against this contract and its last trading day is tomorrow. The HRW basis appears to fully steady and deliveries against July KC have been just minimal at best. Chgo spreads continue to go along with the flat price; in this case today firmer. KC spreads did little but with a very slight bullish bias.

Given today’s price action wheat charts now appeared geared to challenge the highs we saw in late June. The World scenario after today’s report has opened the door for any remaining spec shorts to get covered and/or for small longs to add to existing positions. Dips back to previous highs made this week, I think, should be viewed as new support.

Daily Support & Resistance for 07/12

Sept Chgo Wheat: $5.15 – $5.40

Sept KC Wheat: $4.54 – $4.80

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.