Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed 2 ¼ cents lower ($4.73), Dec 2 ½ cents lower ($4.75 ¼) & March 2 cents lower ($4.81 ½)

Sept KC Wheat closed 2 ½ cents lower ($3.89), Dec 2 ¾ cents lower ($4.02) & March 2 ½ cents lower ($4.17 ½)

Sept Mpls Wheat closed 6 cents lower ($4.92 ¾), Dec 2 ¾ cents lower ($5.11 ¾) & March 2 ¼ cents lower ($5.25 ¼)

Weekly Wheat Export Inspections – 493.0 K T. vs. 400-600 K T. expected

Weekly Winter Wheat Progress – Harvested – 96% vs. 97% expected vs. 99% 5-year average

Weekly Spring Wheat Condition & Progress – 69% GE (-1%) vs. 70% expected vs. 74% year ago – Harvested – 38% vs. 29% expected vs. 65% 5-year average

Egypt announces an overnight tender for optional origin wheat

Last Friday the Chgo wheat market exhibited noticeable strength in response to a sharply lower US Dollar. Today the Dollar reversed a good portion of those losses and the US wheat markets struggled with any further upside follow through. Prices from our export competition remain soft looking although they did show some stabilization vs. recent losses. I have to think it will be some time before the World can churn through existing supplies and that, in turn, will limit any chances at a stout rally. If this year is going to be anything like last year prices will move into a sideways mode sometime in September but at lower levels vs. one year ago.

Advertised basis levels for standard protein wheat continue to run unchanged. This holds true for export values as well. Despite Friday being 1st noticed day for Sept deliveries questions remain as to whether or not we will see any deliveries against the Chgo contract (quality issues). Nothing is currently registered but that can change at the last minute (meaning Thursday afternoon). It is my opinion that the questions around the quality of the SRW crop are the only thing going for the Chgo wheat market.

After 3 ½ days of trying to rally flat price Chgo wheat gets turned away at first resistance level. The KC wheat market appears to be dead in the water as it has spent the last 10 days in a 10-12 cent trading range. I can’t say much for the Mpls market as it keeps grinding away into new contract lows for the past 4 days. It is my thought that as long as the KC market continues to lose to Chgo rallies will be tough to sustain no matter which variety you are trading.

Daily Support & Resistance for 08/27

Dec Chgo Wheat: $4.70 – $4.80

Dec KC Wheat: $3.97 (?) – $4.06 ½

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