Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 1 ¾ cents higher ($4.99 ½), Dec ½ cent higher ($5.07 ¼) & March ¼ cent lower ($5.18 ¼)

Sept KC Wheat closed 2 cents lower ($4.37 ½), Dec ¾ cent lower ($4.55) & March 1 cent lower ($4.72)

Sept Mpls Wheat closed ¾ cent higher ($5.23), Dec ½ cent higher ($5.36 ½) & March ¼ cent higher ($5.50 ½)

Weekly Wheat Export Sales – 659.7 K T. old crop vs. 200-450 K T. expected – no new crop vs. none expected

IGC (International Grains Council) cuts global wheat production to 763.0 M T. (-6.0 M T.) – USDA sits at 771.46 M T.

Weekly wheat export sales come in 200 K T. above expectations. The current sales pace is running 1.65 M T. ahead of last year. Global production is coming down. It seemed like the wheat market, at least for the near term, has a fair amount of positive news going for it yet it put in a very disappointing session (just my opinion) on Thursday. Initially wheat futures did react favorably to the news but as the session went on it was unable to sustain the rally. The Wheat Quality Council spring wheat tour is suggesting yields this year are 43.1 bpa vs. last year’s 41.1 bpa vs. their 5-year average of 44.7 bpa. They did find durum yields sharply lower at 32.0 bpa vs. last year’s 40.0 bpa vs. their 5-year average of 39.3 bpa. The Mpls trade was rather listless today as the trade there appeared to be waiting for their findings.

So what’s with the Ohio River basis? Their corn, soybean and wheat basis all read higher. The wheat basis elsewhere runs mostly unchanged for standard protein wheat. Chgo spreads continue to show improvement. This appears to be a play for quality. KC spreads went the other way today as the Sept was a noticeable loser. If I had to guess KC saw some cash selling with its recent attempt to rally.

We saw a fair amount of favorable news today and the market failed to sustain the rally. That’s not positive for going forward. The current price action is very similar to what we saw last July and August; just a month earlier this year. I’ve often been told that wheat price action is a creature of habit. Right now it looks like that is holding true.

Daily Support & Resistance for 07/26

Sept Chgo Wheat: $4.95 ($4.90) – $5.08

Sept KC Wheat: $4.32 ($4.29) – $4.46

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