Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 4 ¼ cents higher ($4.88 ¼), Dec 3 ½ cents higher ($4.91 ¼) & March 4 cents higher ($5.00)

Sept KC Wheat closed ¼ cent lower ($4.17 ¾), Dec ½ cent higher ($4.35 ¼) & March 1 cent higher ($4.52 ½)

Sept Mpls Wheat closed 1 cent lower ($5.21), Dec 1 ¼ cents lower ($5.31 ½) & March ¼ cent lower ($5.45)Reuters Survey Results for August 12th – Total Production 1.925 billion bu. – Winter Production – 1.294 billion bu. – Spring Production – 569 million bu. – Carryout 999 million bu.

Weekly Wheat Export Sales – old crop vs. 250-500 K T. expected – new crop vs. none expected

Have you ever heard of the adage “Trade wheat – Sleep in the street”? In the early going Wednesday flat price wheat appeared to be on the edge of falling off a cliff. The market ran out of sellers and short covering ensued. There was no news to prompt the buying other than a short term intra-day, inter-day extreme. I remain with the idea the USDA will not have much to offer US wheat futures. Production changes appear to be slight. US Carryout changes appear to be slight. World carryout is expected to come down a couple of million tons. What is glaring is that the world carryout this year vs. last year is expected to show a 9.0 M T. increase. That would suggest the major world exporters will all be vying for market share. When this occurs rallies usually don’t last.

The interior SRW market appears to be steady to easier; the Gulf steady. Chgo spreads ran mixed; Sept gaining on Dec while Dec loses to March and May. Not much appears to be happening with the interior HRW basis or with its export market. KC spreads ran fractionally softer on the day.

Flat price wheat manages to stand in after looking like it was on the edge of coming unglued. I have to think this is all about preparation in respect of the USDA on Monday. As I mentioned no one is expecting to see any major changes in the wheat market’s fundamental make-up. The Chgo market still looks like it is stair-stepping down to its May lows. This market may continue to stand in ahead of the USDA but after that I’m not holding my breath.

Daily Support & Resistance for 08/08

Sept Chgo Wheat: $4.83 – $4.95

Sept KC Wheat: $4.13 – $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.