Wheat Commentary

storck

Wheat – Just My Opinion

Sept Chgo Wheat closed 18 ¼ cents higher ($5.74 ½), Dec 17 ½ cents higher ($5.97 ¼) & March 15 ¾ cents higher ($6.15)

Sept KC Wheat closed 18 ¾ cents higher ($5.86), Dec 18 ¾ cents higher ($6.14) & March 18 ¼ cents higher ($6.31 ½)

Weekly Wheat Export Inspections – 325.4 K T. vs. 300-450 K T. expected

Weekly Winter Wheat Progress – Harvested – 90% vs. 92% 5-year average

Weekly Spring Wheat Conditions & Progress – 74% GE (-4%) vs. 77% expected vs. 32% year ago – Harvested – 13% vs. 16% expected vs. 14% 5-year average

The rationale for Monday’s higher wheat markets has not changed – concerns over global production. Areas of Europe, Black Sea and Australia continue to suffer from hot & dry. Additionally private estimates are calling for lower US wheat production as well. I have to think most of this is in the market but I have think we’re still going to see an eye opener with Friday’s World wheat data (lower). How much of this is in the market remains to be seen. After last Thursday interim spike higher I thought we would see some backing and filling of the recent rally. So far very little has been seen. It now looks like the market wants to see what last Thursday’s highs look like without rumors. I get the impression the trade wants to be as long as it can ahead of Friday’s numbers.

Interior basis levels run unchanged. Gulf basis levels remain unchanged as well. After las week’s late sell-off in the spreads they now appear to be stabilizing. The most notable changes on the day are the year-to-year spreads (old crop vs. new crop). To date we have yet to see any new influx of business. I think that is why early last week’s bull spreading stumbled late in the week.

As long as the World’s primary export origins are having crop problems the bias will remain for higher prices. Initial near term targets are last week’s interim spike high followed by the July ’17 high ($6.12 Sept Chgo & $6.25 ½ Sept KC).

Daily Support & Resistance for 08/07

Sept Chgo Wheat: $5.65 – $5.93 (?)

Sept KC Wheat: $5.75 – $6.05 (?)

 

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