Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 15 ¼ cents lower ($5.07 ¾), Dec 15 cents lower ($5.20) & March 14 ½ cents lower ($5.33)

Sept KC Wheat closed 18 ¼ cents lower ($4.49), Dec 17 ½ cents lower ($4.69 ¼) & March 16 ¼ cents lower ($4.88 ¾)

Sept Mpls Wheat closed 10 ¼ cents lower ($5.32 ½), Dec 10 ¼ cents lower ($5.46) & March 10 ¼ cents lower ($5.60 ¾)

Weekly Wheat Export Inspections – 315.3 K T. vs. 400-600 K T. expected

Weekly Winter Wheat Progress – Harvested – 57% vs. 62% expected vs. 71% 5-year average

Weekly Spring Wheat Condition & Progress – 76% GE vs. 78% expected vs. 80% year ago – Headed – 78% vs. 87% 5-year average

US wheat futures succumb to lower corn prices and harvest pressure. During the Sunday night trade US wheat futures tried to go it alone to the upside on another announced cut in the Russian crop size but that soon faded as the rest of the Ag complex sagged. Harvest is not only happening in this country but also in Europe and Russia. Despite the idea that crop sizes overseas are being cut due to earlier hot and dry conditions crop sizes are still larger vs. one year ago. US export demand is only so-so as evidenced by the weak looking export inspections. Earlier this season the trade was fearful about not having enough milling quality wheat. As we move through harvest those fears are being eased. Our export competition is thought to have good milling quality wheat as well.

Interior cash wheat markets have taken on a mixed look. Areas where harvest has come and gone basis levels appear steady to a touch better. Areas where harvest is happening basis levels are looking steady to a touch easier. I do think we saw some cash wheat move prior to today’s break. Futures’ spreads softened a bit with today’s flat price selling.

Today’s dump in wheat prices suggests this market cannot go it alone to the upside. The price action we saw today further suggests a possible test of the support that was established early last week. Like the rest of our Ag markets wheat futures too are biased to develop into a trading range affair. Since I feel US wheat futures are more of a follower vs. being a leader and I’m suggesting the Ag complex will develop into trading range affairs wheat should too.

Daily Support & Resistance for 07/16

Sept Chgo Wheat: $5.00 – $5.20

Sept KC Wheat: $4.40 – $4.60

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.