Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 10 ½ cents lower ($4.84), Dec 7 cents lower ($4.87 ¾) & March 7 ¾ cents lower ($4.96)

Sept KC Wheat closed 8 ¾ cents lower ($4.18), Dec 8 ½ cents lower ($4.34 ¾) & March 8 ¼ cents lower ($4.51 ½)

Sept Mpls Wheat closed 2 ½ cents lower ($5.22), Dec 3 ½ cents lower ($5.32 ¾) & March 4 cents lower ($5.45 ¼)

Results of Egyptian overnight tender for optional origin wheat – 415.0 K T. bought – 115.0 K T. Ukraine, 240.0 K T. Russia, 60.0 K T. Romania – average price paid $219.10 vs. 219.35 on July 23rd when they bought 300.0 K T.

Bloomberg Survey Results for August 12th – Total Production 1.928 billion bu. – Winter Production – 1.295 billion bu. – Spring Production – 573 million bu. – Carryout 998 million bu.

Once again the US does not participate in the overnight Egyptian tender. World prices continue to show a bias for lower prices. For as much as US wheat futures tried to look good on Monday they looked that bad on Tuesday. Adding to the grim looking performance the Chgo spreads appear to be giving up the ship. How much of that is in anticipation of the index fund roll (starts tomorrow; the little guys were moving today) remains to be seen.

Interior SRW cash markets look steady to a shade easier while the interior HRW cash markets look steady to better. The export market for both varieties continues to be quiet. The Chgo spread market had something for everyone; Sept loses noticeably while Dec gains on March, May and July. Longer term the current marketing year loses to the next marketing year.

The Chgo price action is almost scary looking as it tries to flag higher against the overall downtrend. The KC price action has gone into a mini sideways mode. Overall the price action does not look too encouraging for anyone trying to be long. Prices may try and stand in between now and next Monday but I really don’t see the USDA saying anything too positive.

Daily Support & Resistance for 08/07

Sept Chgo Wheat: $4.80 ($4.75) – $5.92

Sept KC Wheat: $4.14 ($4.10) – $4.25

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.