Wheat Commentary


Wheat – Just My Opinion

Sept Chgo Wheat closed ¾ cent higher ($4.73 ¾), Dec 1 ½ cents higher ($4.76 ¾) & March ¼ cent higher ($4.81 ¾)

Sept KC Wheat closed 3 ¾ cents higher ($3.92 ¾), Dec 2 ¾ cents higher ($4.04 ¾) & March 2 ½ cents higher ($4.20)

Sept Mpls Wheat closed 1 ½ cents higher ($4.94 ¼), Dec ¾ cent lower ($5.11) & March 1 cent lower ($5.24 ¼)

Egypt announces an overnight tender for optional origin wheat – overnight Egypt buys 350 K T. of wheat; 60 K T. French, 60 K T. Ukraine & 230 K T. Russian

It appears inter-market spreading has become a primary feature in the US wheat futures. On Friday when corn and soy were lower wheat was higher. On Monday when corn and soy were higher wheat was lower. Today we saw lower corn and soy and wheat was higher. I also think some of the prices Egypt paid for wheat were mildly supportive. Nearby spreads were active in the varieties as position jockeying was seen ahead of Friday’s 1st notice day. I’m not sure we will see any deliveries against the Chgo contract while KC and Mpls could be a totally different story.

Advertised basis levels for standard protein wheat run unchanged as do export prices. As I mentioned the spread action is all about positioning for 1st notice day.

Dec KC wheat continues in the same 10-12 cent range it has been in dating back to August 14th. Closes above $4.10 in the Dec KC has me thinking it will attract some short covering as it’s the KC market that has the greatest concentration of spec shorts. Chgo wheat continues to trade in the down channel it has been in since the market topped out in late June. Last week we tested the support of the channel – now it’s probably time to test the resistance of the channel.

Daily Support & Resistance for 08/28

Dec Chgo Wheat: $4.72 – $4.84

Dec KC Wheat: $4.01 – $4.12

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.